The  Evolution 


Money 


ercy  Kinnaird 

Nashville.  Tenn, 


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The  Evolution  of  Money 


By 
PERCY  KINNAIRD, 

Nashville,  Tenn. 


Book $i.oo 

Pamphlet     - 50 


MARSHALL  &   BRUCE  CO. 

Nashville,  Tcnn. 

KvOQ 


COPYRIGHT 
PERCY  KINNAIHO 


CONTENTS. 


PAGE 

Introduction    5 

Chapter  I    11 

Chapter  II    21 

Chapter  III    32 

Chapter  IV     40 

Chapter  V     52 

Chapter  VI     67 

Chapter  VII     82 

Chapter  VIII     99 

Chapter  IX    112 

Chapter  X    122 

Chapter  XI     137 

Chapter  XII     14G 

(3) 


^^tiuusa 


"  IVe  of  this  age  are  victims  of  men  who  fastened 
upon  our  forbears  doctrines  horn  in  the  greed  of 
power — the  thirst  for  supremacy." 

— Gems  of  Thought. 


INTRODUCTION. 


hu  M  HE  civic  unrest  from  which  humanity  suffers  has 
its  causes,  and,  though  the  unrest  is  world-wide, 
intelligence  has  so  far  failed  to  detect  the  domi- 
nant cause,  and  expose  its  workings. 

There  are  paradoxes  in  the  periods  of  unrest  that  fal- 
sify reason  until  the  logic  of  the  highest  intelligence  de- 
generates into  mysticiism. 

Some  of  these  paradoxes  are  the  i3eriods  when  the  peo- 
ple suffer  from  privation  because  nature  has  been  so  pro- 
lific in  her  returns  to  their  labor  that  the  horn  of  plenty 
is  overflowing;  others  are  the  periods  of  good  living  and 
comfort,  notwithstanding  nature  has  not  returned  to 
their  labor  an  average  yield. 

The  suffering  in  the  one  case  may  not  be  attributed  to 
the  scarcity  of  returns  from  labor,  but  has  to  be  attributed 
to  want,  caused  solely  by  inability  to  find  emj^loyment 
that  will  earn  the  money  necessary  to  purchase  those 
things  produced  in  excess  for  others. 

The  comfort  in  the  other  is  not  so  much  due  to  labor 
as  to  the  shortness  in  nature's  yield,  which  preserves  the 
opportunity  to  work,  and  earn  the  money  necessary  to 
preserve  existence. 

In  the  one  case  we  have  the  anomaly  of  overproduction 
being  the  cause  of  suffering  to  the  point  of  starvation  for 
some,  because  of  the  inability  of  many — who  overlabored 
for  tlie  profit  of  others — to  secure  enough  of  the  excess 
to  preserve  life,  though  the  excess  may  be  lying  idle  in 
the  warehouses.  In  the  other  we  have  the  anomaly  of 
under-production  being  the  cause  of  comparative  comfort 
and  good  living,  solely  because  scarcity  of  products  has 
preserved  the  opi)ortunity  to  work  and  earn  money. 


g  IXTRODUCTION. 

We  have  the  further  auomaly  of  a  civilization  that 
forms  goverumeut  for  the  express  purpose  of  securing 
to  labor  the  enjoyment  of  its  productions,  being  most  im- 
potent in  the  years  succeeding  the  years  of  its  greatest 
efforts  and  largest  excess  of  products. 

We  have  the  auomaly  of  a  Christian  civilization  that 
can  give  no  relief  to  the  starving  except  by  the  exercise 
of  a  so-called  Christian  charity,  until  the  surplus  pro- 
duced for  others  has  been  consumed  by  those  only  who 
can  secure  employment,  and  earn  the  necessary  money. 

The  over-production  for  a  period  of  years,  and  under- 
consumption, or  starvation,  for  succeeding  years,  is 
claimed  to  be  one  of  the  unavoidable  incidents  of  this 
Christian  civilization,  for  which  there  is  no  relief  except 
the  enlarged  exercise  of  a  more  Christian  charity. 
Therefore,  under  forms  of  government — organized  by 
Christian  civilization — deprivation  to  the  point  of  starva- 
tion on  the  part  of  many — who  over-labored  until  they 
produced  an  excess — must  be  endured  for  the  benefit  of 
those  for  whom  they  over-labored,  until  the  excess  can 
be  profitably  disposed  of. 

As  the  excess  is  disposed  of,  and  consumed,  those  who 
receive  the  profits,  find  it  to  be  to  their  interest  to  gener- 
ously grant  permission  to  the  starving  ones  to  resume 
work,  until  an  excess  above  consumption  is  again  accumu- 
lated. 

As  the  starving  ones  are  reemployed,  and  use  the  money 
earned  to  purchase  the  excess,  and  subsequent  produc- 
tions, consumption  for  a  time  keeps  pace  with  production. 

This  increases  the  price  of  products,  and  enables  those 
who  exercise  charity — or  furnish  the  money  to  others — to 
regain  their  contributions,  and  enlarge  their  wealth. 

We  have,  therefore,  the  paradox  that  charity  is  not 
altogether  a  Christian  virtue,  but  in  many  respects  a 
business  investment ;  for  it  is  to  the  interest  of  those  who 
work  others  for  profit,  to  keep  the  workers  alive  during 
the  time  their  labor  mav  not  be  utilized. 


ll^TRODVCTIOU.  7 

It  is  evident  from  the  foregoing,  though  in  a  state  of 
nature  man  only  enjoved  such  fruit  of  his  labor  as  he  was 
able  to  keep  from  his  more  powerful  enemies,  that  there 
are  manv  periods — under  a  government  of  Christian  civ- 
ilization— when  he  is  deprived  of  the  opportunity  to  labor; 
and  if  he  continues  to  exist,  it  is  as  the  recipient  of 
charity. 

In  a  state  of  nature  man  must  produce  before  he  may 
consume;  but  in  a  government  of  Christian  civilization 
he  must  ijroduce  and  distribute  before  he  may  consume. 

In  a  state  of  nature,  man,  therefore,  is  only  concerned 
with  the  problems  of  production  and  consumption. 

As  he,  by  diversity  of  occupation,  processes  to  civiliza- 
tion, he  more  and  more  relies  on  distribution  until  a  sys- 
tem of  specialization  is  developed,  when  he  is  more  de- 
pendent on  distribution,  and  the  opportunity  to  produce, 
than  on  his  ability  to  produce. 

Man,  therefore,  in  his  ability  to  secure  means  to  pre- 
serve his  existence,  has  been  dependent  upon,  and  con- 
trolled by,  the  intelligence  exhibited  in  the  growth  of  the 
ever-changing  devices  first  employed  to  aid  production 
and  consuinption,  and  subsequently  employed  to  aid  pro- 
duction, distribution,  and  consumption  from  the  time  he 
consumed  only  what  he  produced,  to  the  time  he  con- 
sumes only  that  which  others  produce. 

In  an  analysis  of  the  changes  made — in  the  devices 
used — as  man  progressed  from  a  being,  compelled  to  sup- 
ply his  wants  by  the  personal  production  of  everything 
he  consumed,  to  the  civilized  person,  compelled  to  supply 
his  needs  by  the  purchase  of  things  produced  by  others, 
may  be  found  the  dominant  cause  that  operates  to  create 
those  inequalities  and  injustices  which  generate  the 
present  world-wide  civic  unrest. 

The  present  dominant  necessity  that  man  must  have 
money  with  which  to  secure  those  things  needed  to  pre- 
serve existence;  and  the  equally  dominant,  but  dependent, 
necessity  that  he  must  have  em]»loymont  to  secure  the 


8  IXTRODUCTIOK. 

money,  makes  his  existence  depend  more  on  the  acquisi- 
tion of  money  than  upon  the  God-given  right  to  labor. 

From  this  it  is  evident  that  under  this  Christian  civili- 
zation, man's  God-given  right  to  exist  by  the  sweat  of 
his  face  has  been  changed,  until  it  is  now  dependent 
upon  his  opportunity  to  sell  his  labor  for  money. 

If  man  may  no  longer,  in  Christian  governments,  rely 
upon  his  labor  to  preserve  his  existence;  if  under  the 
present  system  the  many  work  for  the  few  until  they  pro- 
duce an  excess;  and  then  have  to  starve  until  the  excess 
may  be  consumed  by  those  only  whose  labor  can  be  profit- 
ably employed,  is  it  not  time  to  seriously  consider  the 
issue  of  money,  its  changes,  nature,  character,  and  inci- 
dents in  the  hope  that  there  may  be  returned  to  man  his 
God-given  right  to  live  by  the  sweat  of  his  face,  and  cease 
making  his  existence  depend  upon  the  methods  by  which 
a  special  class  issue  money? 

The  causes,  therefore,  that  operate  to  create  the  civic 
unrest  must  be  found  in  the  method  of  procedure  for  the 
issue  of  money. 

Inasmuch  as  money  is,  and  has  ever  been,  the  concrete 
expression  of  the  changes  in  the  growth  of  those  devices, 
which  have  enabled  man  to  form  and  sustain  those  gre- 
garious relations  that  diversity  of  occupations  have  de- 
veloped into  the  sj^cialization  that  is  the  civilization  of 
today,  it  has  so  dominated  his  life  that  intelligence  has 
failed  to  take  the  proper  notice  of  the  changes;  and  has 
also  failed  to  correctly  apprehend  the  nature,  incidents, 
and  character  of  money  in  the  many  changes  it  has  under- 
gone in  its  growth,  or  evolution. 

It  is  realized  that  this  is  due : 

First. — To  the  fact  that  the  changes  have  been  'psychical 
as  icell  as  physical:  and  while  the  physical  changes  have 
been  considered  and  provided  for,  no  consideration  has 
been  given  nor  provision  made  for  the  psychical  changes. 

Seconfl. — To  the  fact  that  the  changes  in  the  nature, 
character,  and  incidents  of  the  devices,  used  as  money. 


IXTRODUCTWy.  9 

have  beeu  so  taken  advantage  of  to  promote  avaricious 
lust  for  power,  that  intelligence  is  held  in  the  bondage  of 
a  financial  mysticism  that  is  criminal  in  its  application 
to  the  practices  of  the  people. 

The  civic  unrest  that  has  beeu  caused  by  the  failure  to 
take  into  consideration  the  i)sychic  changes  has  at  differ- 
ent periods  been  ameliorated  by  the  physical  changes  that 
have  been  made,  but  none  has  stood  the  test  of  time ;  and 
man}-  have  made  conditions  worse. 

Until  the  motives  and  causes  that  create  conditions — 
known  as  civic  unrest — are  discovered,  the  changes — seek- 
ing relief — will  not  attain  to  the  dignity  of  a  science,  but 
may  only  be  known  as  the  Doctrine  of  Expediency. 

The  Doctrine  of  Expediency  is  an  acknowledgment  that 
relief  sought  by  its  aid  is  merely  an  experiment,  without 
knowledge  of  the  causes  and  motives  that  create  the 
necessity  for  relief.  So  long  as  the  motives  and  causes 
that  create  unwholesome  conditions  are  hidden,  changes 
seeking  relief  are  tentative ;  and,  therefore,  the  exercise  of 
power  to  compel  the  people  to  accept  the  change  is  justified 
on  the  ground  that  it  may  minimize,  if  not  entirely  cease, 
the  evils. 

Some  one  expedient  commends  itself  to  the  cupidity 
and  ambitious  lust  for  power  of  a  class,  especially  when 
that  class  is  given'  the  governmental  power  that  protects 
and  enlarges  its  interests,  viz:  the  power  to  issue  money. 

To  dignify  their  use,  and  justify  their  retention,  such 
expedients  are  called  Working  Theories. 

When  a  Working  Theory  has  been  sustained  for  a  long 
time  by  the  exercise  of  governmental  power,  the  class 
that  profits  most  from  its  operations  contend  that  it  is 
scientific,  because,  as  claimed,  it  secures  the  best  results 
of  the  many  experiments  that  have  been  tried. 

Tn  such  cases  it  is  almost  imj)ossible  to  so  ex])ose  the 
causes  and  motives — which  create  the  unwholesome  con- 
ditions— as  to  induce  intelligence  to  comprehend  or  ac- 
cept the  exposition,  for  class  makes  it  to  the  interest  of 


10  IXTRODUCTIoy. 

iutelligeuce  to  deu^-  tlie  evidence  of  the  senses,  and  ques- 
tion tlie  correctness  of  the  purest  logic — especially  when 
the  attack  is  made  upon  those  Working  Theories  that 
enable  class  to  live  in  the  castles  and  palaces  of  the 
countries. 

Under  the  Doctrine  of  Expediency  there  is  nothing  left 
that  may  be  done  with  any  hope  of  relief,  for  all  the 
physical  changes  have  been  made  that  the  properties  of 
the  substances  deemed  fit  to  be  used  as  money  are  suscept- 
ible of,  and,  therefore,  if  the  correct  theory  for  the  issue  of 
money,  /.  c.  the  Science  of  Finance,  is  ever  to  be  discov- 
ered, it  must  be  from  an  examination  and  consideration 
of  the  psychic  changes  that  have,  so  steadily,  if  uncon- 
sciously, been  going  on  in  reference  to  the  instruments 
used  as  money. 

The  present  work  is  intended  to  indicate  the  psj/chic 
changes  that  have  taken  place,  and  to  show  that  they  have 
been  the  necessary,  if  unconscious,  growth  of  man's  de- 
mands for  serviceable  instruments  that  would  enable  him 
to  escape  from  savagery  and  barbarism  to  the  Christian 
civilization  that  promises  so  much  happiness  and  pros- 
perity. 

It  is  also  intended  to  show  that  man  does  not  enjoy 
that  happiness  and  prosperity,  solely  because  civilization 
neglects,  and  refuses  to  take  notice  of,  or  show  any  ap- 
preciation of,  the  psychic  changes  that  have  taken  place 
in  the  growth  of  the  devices,  used  as  money;  changes 
which  were  at  first  so  essential  as  aids  to  production  and 
consumption,  and  are  now  still  more  essential  as  aids  to 
production,  distribution,  and  consumption  in  the  effort 
to  preserve  existence. 


THE  EVOLUTION  OF  MONEY. 


CHxVPTEK  I. 


OJS'EY  has  evolved  from  concrete  objects  of  in- 
triusic  worth,  used  as  standards  of  value,  to 
paper  representatives  of  "words,"  originated  to 
express  the  unit  of  value  and  its  multiples  and  subdi- 
visions. 

Paper  representatives  of  the  "words"  of  value,  when 
given  the  sovereign  power  of  Legal  Tender,  are  Standards 
of  Payment,  because  they  are  representativas  of  "icords" 
that  arc  the  standards  of  value. 

A  designated  amount  of  money  may  only  be  expressed 
by  certain  "words"  that  are  the  multiples  and  subdi- 
visions of  the  "word"  that  is  the  Unit  of  Value. 

The  "word"  that  expresses  the  ''Unit  of  Value,"  and 
the  "words"   that  express  its  multiples  and  its   subdi 
visions,  are  the  language  of  finance,  /.  e.,  the  "words"  of 
the  "Money  of  Account." 

A'alue,  according  to  Adam  Smith,  the  greatest  of  the 
economic  philosophers,  has  its  source  or  origin  in  labor, 
and  the  "words"  of  value,  or  of  the  "Money  of  Account," 
according  to  Sir  James  StcAvart,  the  only  financial  scien- 
tist, must  be  expressions  of  labor ;  and  should,  as  he  states, 
"Perform  the  same  office  with  regard  to  the  value  of 
things,  that  degrees,  minutes,  and  seconds  do  with  regard 
to  angles,  or  as  scales  do  to  geographic  maps.     .     .     ." 

Therefore,  that  which  is  meant  by  the  use  of  the  "word," 
money,  is  the  latest  manifestation  of  the  evolution  in  the 
character,  incidents,  and  quality  of  those  instru- 
ments issued,  as  official  reprasentatives  of  the  "words" 


12  THE  EVOLUTION  OF  MONEY. 

of  the  Money  of  Account,  to  express  the  ideas  of  value, 
i,  €.,  of  labor,  which  the  ''words''  are  intended  to  convey, 
when  their  concrete  representatives  are  used  as  the  stand- 
ards of  payment,  though  called  standards  of  value. 

This  evolution  changed  the  use  of  tokens  by  the  savages 
to  the  use  of  mediums  of  exchange  by  the  barbarians; 
changed  the  use  of  mediums  by  the  barbarians  to  the 
use  of  gold  and  silver,  and  their  substitutes,  by  partly 
civilized  man;  changed  the  use  of  gold  and  silver,  and 
their  substitutes,  by  partly  civilized  man  to  the  use  of  gold 
and  its  representatives,  b}'  a  higher  civilization;  and  is 
now  changing  the  use  of  gold,  and  its  representatives,  to 
the  exclusive  use  of  official  or  legal  tender  paper  repre- 
seutatiA'es  of  the  ''words"  of  the  ''Money  of  Account,"  for 
the  betterment  of  the  condition  of  all  the  people. 

This  evolution  is  now  changing  man's  idea  that  the 
standards  of  value  are  concrete  objects  of  intrinsic  worth 
to  the  realization  that  they  are  the  ''words"  of  the  "Money 
of  Account,"  whose  concrete  representatives  should  only 
give  expression  to  his  concepts. 

These  concepts  are  ideas  of  the  relations  that  products 
bear  to  each  other,  considering  only  the  number  of  labor 
units  involved. 

The  ideas  may  only  be  expressed  by  the  ''words"  of  "the 
Money  of  Account,"  and,  when  the  "words"  are  rei)re- 
sented  l)y  printed  pieces  of  paper  which  bear  the  govern- 
mental power  of  Tender,  they  more  stably,  equitably,  and 
expeditiously  perform  the  service  required  of  them  than 
do  coins  of  gold  bearing  that  power. 

In  his  progress  from  the  condition  of  a  savage  to  that 
of  a  barbarian,  and  then  to  a  civilized  being,  man  has 
undergone  a  wonderful  growth.  This  growth  must  be 
taken  into  consideration  when  the  endeavor  is  made  to 
ascertain  what  is  money. 

The  factor  that  has  been  most  instrumental  in  advanc- 
ing man  from  a  savage  to  a  barbarian,  and  then  to  a 
partly  civilized  being,  has  been  the  use  that  he  has  made 


THE  EVOLVTIOy  OF  J/OXEY.  13 

of  his  faeiilties  iu  guidiug  and  coutrolliug  his  eft'orts  to 
Ijreserve  existence,  and  secure  comfort  and  happiness. 

When  man's  efforts  are  so  expended  that  they  return 
the  largest  yield  of  those  things  essential  to  existence, 
they  are  under  subjection  to  his  highest  and  best  faculties. 

The  germ  of  civilization  was  necessarily  diversity  of 
occupations,  which,  as  it  widens  until  it  becomes  special- 
ization, is  the  highest  civilization. 

Maximum  returns  to  man's  efforts  may  only  be  had  by 
diversity  of  occupations,  carried  to  the  extremest  limit 
of  specialization.  The  more  specialization,  the  greater 
necessity  for  exchanges.  The  greater  the  exchanges  the 
higher  the  necessity  for  serviceable,  efficient,  conven- 
ient, and  expeditious  instruments  for  effecting  the  ex- 
changes. 

Whether  man  can  progress  from  the  condition  of  a 
savage,  through  barbarism  to  civilization,  depends  upon 
whether  the  primitive  idea  of  diversity  of  occupations 
can  be  developed  to  that  of  specialization.  If  it  cannot, 
progress  ceases  when  the  limit  of  man's  capacity  to  diver- 
sify occupations  has  been  reached. 

The  civilization  of  those  who  have  no  limit  to  their 
capacity  to  specialize  may  be  wholesome,  or  it  may  be 
foul.  The  quality  of  the  civilization  depends  upon  the 
character,  incidents,  and  utility  of  the  instruments  that 
effect  the  exchanges,  and  which  dominate  and  control  all 
methods  of  procedure  for  the  creation  and  distribution  of 
]»roducts.  If  the  instruments,  with  which  exchanges  are 
effected,  are  operated  in  practice,  and  sustained  in  law,  so 
as  to  secure  a  just  return  for  the  labor  that  created  the 
products,  the  civilizati(m  is  wholesome.  If  the  instru- 
ments are  made  to  so  operate,  either  in  practice  or  in 
law,  that  the  justice  and  equity  of  a  fair  return  for  the 
labor  expended  is  not  secured,  then  the  civilization  is  foul. 

The  savages  responded  to  the  demand  that  they  should 
diversifv  their  pursuit  of  game  in  order  that  they  might 
enjoy  diversity  of  those  things  which  preserved  life,  when 


14  THE  EVOLUTION  OF  MONEY. 

thej  devised  tokens  which  served  their  use  in  making  ex- 
changes, as  money  serves  our  use  today. 

The  barbarians  responded  to  the  demand  that  they 
should  enlarge  the  diversity  of  occupations  in  order  that 
they  might  enjoj*  that  larger  diversity  of  things  which  pre- 
served life,  tickled  the  palate,  and  secured  some  addi- 
tional comforts  when  they  enlarged  the  idea  of  tokens 
until  they  devised  mediums  of  exchange  which  served  their 
use,  as  money  serves  ours  today. 

Man  continued  to  respond  to  the  demand  for  diversity 
of  occupations,  by  the  changes  made  in  the  things  used  as 
mediums,  until  gold  and  silver  were  finally  selected  as 
the  substances  best  fitted  for  that  purpose — when,  it  may 
be  stated,  the  stage  in  his  development  was  reached  that 
is  called  tlie  dawn  of  civilization. 

In  practice  the  savage,  the  barbarian,  and  civilized  man 
made  similar  use,  respectively,  of  the  tokens,  the  me- 
diums, and  gold  and  silver;  and  they  experienced  similar 
advantages  and  disadvantages, 

Man  has  ever  suftered  from  the  inconvenience,  the  un- 
certainty, and  instability  of  the  use  of  those  things  with 
which  he  effected  exchanges.  This  defect  neither  the 
savage,  the  barbarian,  nor  civilized  man  has  ever  been 
able  to  remedy — and  humanity  suffers  from  it  today. 

The  savage  and  the  barbarian  endeavored  to  secure 
certainty  and  stability  in  the  use  of  their  tokens  and 
mediums,  by  the  selection  of  those  things  regarded  as  so 
precious  that  they  were  willing  to  exchange  anything 
they  i)ossessed  for  them.  So  long  as  the  things  selected 
retained  this  regard,  their  use  was  certain  and  stable  to 
a  high  degree  of  efficiency.  But,  as  this  regard  changed — 
and  it  changed  often  and  for  many  reasons — the  tokens 
and  mediums  became  so  uncertain,  and  so  unstable  in  use. 
that  something  else,  which  would  secure  the  required  cer- 
tainty and  stability  of  use,  was  selected. 

That  the  inherent  worth  of  the  things  selected  was  not 
the  cause  of  their  use,  is  evident  from  the  consideration 


THE  EVOLUTIOX  OF  MONEY.  15 

that  it  made  no  diflereuce  what  was  selected,  nor  how 
precious  it  may  have  been  regarded,  it  invariably  lost 
that  regard  in  part,  and  something  was  selected  which 
Avould  more  fully,  and  more  stably,  command  the  regard 
that  the  barbarian  insisted  the  thing  should  have. 

What  is  the  source  or  cause  of  this  demand  for  a 
change  of  the  mediums  to  something  which  has  the  in- 
trinsic worth  that  the  barbarian  always  denuinded  it 
should  have ;  and  which  demand  has  passed  on  to  civilized 
man  in  growing  force? 

Neither  the  tokens  of  the  savage  nor  the  mediums  of 
the  barbarian  colisciously  represented,  in  their  use,  ideas 
of  the  relations  that  the  things  exchanged  bore  to  each 
other,  considering  the  efforts  expended  in  securing  or  in 
producing  the  things,  for  neither  had  any  consciousness 
of  such  ideas — but  it  is  unthinkable  that  subconsciou8ly 
this  was  not  the  cause  of  the  demand  for  the  many 
changes  made  in  the  things  used  as  mediums. 

Neither  the  savage  uor  the  barbarian  considered  the 
use  of  the  tokens  or  the  use  of  the  mediums  as  one  of 
the  qualities  that  sustained  their  regard  for  them,  and 
they  have  passed  this  error,  unimpaired,  on  to  civilized 
man ;  but  they  supposed,  and  assumed — as  does  civilized 
man  with  his  gold  and  silver  coins — that  the  tokens  and 
mediums  were  selected  because  of  the  inherent  properties 
which  caused  them  to  be  regarded  as  so  precious. 

This  idea  of  the  worth  of  the  inherent  qualities  of  the 
things  selected,  being  the  cause  of  their  selection,  has 
dominated  the  savage,  the  barbarian,  and  civilized  man, 
notwithstanding  everything  which  has  been  selected,  in- 
cluding gold  and  silver,  lose  in  their  assigned  values,  even 
when  the  worth  of  the  inherent  pro])erties  is  sustained  by 
the  demand  for  them  as  mediums  of  exchange. 

That  the  subconsciousness  of  the  savage  and  ol'  the 
barbarian,  in  determining  an  estimate  of  the  worth  of  the 
things  selected,  had  to  be  based  upon  unconscious  ideas 
of    the    worth    of    their    otloi-ts    is    metai»hysically    true, 


16  THE  EVOLITWX  OF  MOyEY. 

thongli  thej  had  no  consciousness  of  it,  and,  therefore,  the 
tokens  and  mediums  reprasented  their  subconscious  ideas 
of  the  efforts  expended  in  securing,  or  in  producing,  the 
things  to  be  exchanged;  and,  as  they  subconsciously  com- 
jjared  their  efforts  with  their  ideas  of  the  efforts  of  others, 
who  had  things  which  they  needed,  they  formed  another 
set  of  subconscious  ideas  in  reference  to  the  relation  their 
products  bore  to  the  products  of  the  others,  considering 
the  efforts  each  had  expended. 

The  idea  of  this  relation  between  products  is  subcon- 
sciously endeavored  to  be  expressed  by  the  selection  of 
something  regarded  as  the  full  equivalent  of  the  effort 
expended  on  the  product;  and  so  long  as  the  thing  se- 
lected is  regarded  as  the  full  equivalent  of  the  effort  ex- 
pended, and  will  be  readily  accepted  in  exchange,  man 
was  willing  to  continue  his  efforts,  and  exchange  his  sur- 
])lus  for  the  mediums. 

Tokens,  mediums,  and  gold  and  silver  have  always 
represented  ideas  of  the  relation  that  the  efforts  of  man — 
when  crystal ized  into  products — bear  to  each  other,  as  has 
often  been  demonstrated  by  the  retention  of  the  use  of  the 
idea,  after  the  abandonment  of  the  things  selected  to  con- 
vey it:  and  it  is  not  understood  why  the  fallacy  that  the 
intrinsic  quality  of  the  medium  determines  and  dominates 
its  use  is  so  generally  accepted,  when  in  practice  its  use 
always  dominates,  until  hroufjlit  under  the  suhjection  of 
intrinsic-value  hy  force  of  the  law. 

Inasmuch  as  the  mediums  were  subconsciously  used  to 
express  ideas  of  the  relation  of  products  to  each  other, 
and  inasmuch  as  these  ideas,  and  all  other  ideas,  must 
have  a  means  of  communication  to  intelligence,  it  became 
necessary  to  devise  a  method.  Words  were,  therefore, 
originated  to  name  the  products,  and  to  name  the  things 
selected  as  tokens  and  mediums;  and  when  those  words 
were  used,  they  conveyed  ideas  of  the  products,  and  ideas 
of  what  the  tokens  and  mediums  represented.  The  words 
that  name  the  products  are  a  part  of  what  is  known  as  the 


THE  EVOLUTIOX  OF  IIOXEY.  17 

language  of  a  people.  The  words  originated  to  express 
or  convey  the  subcouscions  ideas  of  the  relation  of 
products  to  each  other,  and  which  were  used  to  name  the 
tokens  and  mediums,  are  now  known  as  "Money  of  Ac- 
count," or  the  language  of  finance. 

The  language  of  finance  is  peculiar — in  that  to  be 
serviceable  and  efficient  in  conveying  ideas  (for  words 
only  convey  ideas) — it  has  to  have  a  "word,"  known  and 
regarded  as  the  Unit,  and  other  "words,"  known  and  re- 
garded as  the  multiples  and  subdivisions  of  that  Unit. 

If  some  "word"  was  originated  or,  after  it  was  origi- 
nated was  selected,  to  name  the  Unit,  and  other  wordiS 
were  selected  to  name  the  multiples  and  subdivisions  of 
the  unit,  is  it  not  all-important  to  determine  what  the 
"word"  is  the  unit  of — since  the  thing  it  was  used  to 
name  is  regarded  as  the  standard  and  measure  of  the 
worth  of  other  things? 

The  statesmen  and  the  economists  have  stated  it  is  the 
Unit  of  Value. 

The  scientists  have  claimed  it  is  the  Unit  of  the  "Money 
of  Account." 

When  the  statesmen  and  economists  have  defined  value 
they  have  failed  to  satisfy  the  intelligence  of  practical 
experience.  They  derived  their  idea  that  the  unit  was  one 
of  value  from  the  savage  and  the  barbarian.  The  savage 
and  the  barbarian,  respectively',  used  tokens  and  mediums, 
as  standards,  and,  therefore,  as  the  measure  of  the  worth 
of  other  things.  Their  estimate  of  the  worth  of  the  tokens, 
or  of  the  mediums,  was  determined  by  the  intensity  and 
strength  of  their  desire  for  them ;  and  things  Avere  ex- 
changed for  them  without  taking  into  conscious  considera- 
tion their  efforts  in  securing  or  producing  the  things. 

While  this  is  true,  it  is  known — however  strong  may 
have  been  the  desire  of  the  savage  for  tlie  tokens — they 
were  often  changed ;  and  since  the  savage  had  no  con- 
sciousness of  tlie  subconscious  working  of  his  mind,  the 
changes  were  attributed  to  his  fitful  fancies. 
2 


18  THE  EVOLUTION  OF  BIONEY. 

Worth— or  what  is  now  known  as  value — was,  there- 
fore, regarded  as  the  concrete  material  thing,  used  as  a 
token;  and  its  Avorth,  or  A'alue,  was  assumed  to  be  those 
inherent  qualities  which  excited  the  savages'  desire. 

In  its  last  analysis,  worth  was  the  strength  of  that 
desire,  and  that  which  was  chosen  to  represent  that  in- 
tensity^ of  desire,  was  eudoAved  Avith  the  desire,  and  would 
command  all  other  things  in  exchange. 

This  made  a  concretion  of  the  saA^ages'  desire;  and  the 
token,  which  represented  and  satisfied  that  desire,  was  to 
him  worth,  as  gold  and  sih'er,  in  the  opinion  of  today, 
are  value. 

The  barbarian  regarded  his  mediums  as  the  savage  re- 
garded his  tokens— not  as  a  thing  chosen  to  represent  the 
strength  of  his  desires,  nor  as  symbolic  of  his  ideas  of 
Avorth — but  as  that  which  was  worth;  and  therefore  his 
idea  of  A^alue  was  the  concrete  thing  AA'hich  he  used  as  a 
standard  to  measure  the  worth  of  all  other  things. 

The  crudeness  of  exchanges  made  by  the  saA'age  may 
not  haA'e  demanded  the  devising  a  Unit,  but  the  stage  to 
Avhich  the  barbarian  had  attained,  developed  a  crude 
equity  that  demanded  a  Unit,  and  multiples  and  sub- 
divisions of  the  Unit. 

The  idea  of  fairness  in  exchanges  that  developed  numer- 
als, indicates  that  an  idea  of  equity,  hoAA'ever  crude,  was 
being  aAvakened  in  the  barbarian  mind. 

This  idea  of  equity  indicates  a  desire,  or  determination, 
to  secure  a  perfect  equivalent  of  something,  Avhen 
products  were  exchanged  for  mediums. 

The  something,  for  which  numerals  were  devised  to 
secure  an  equivalent,  could  be  nothing  other  than  that 
AAhich  was  put  into  the  product,  and  which  made  it  so 
desirable  that  it  could  be  readily  exchanged  for  the 
mediums.  Those  things  which  made  the  product  so  desir- 
able that  it  Avould  exchange  for  the  mediums  could  be 
nothing  other  than  those  efforts  of  man,  now  known  as 
labor,  that  shaped  some  of  nature's  products  into  forms 


THE  EVOLUTION  OF  2I0XEY.  19 

of  usefulness.  Therefore,  if  the  mediums  had  to  be  re- 
garded as  Units,  multiples,  and  subdivisions  in  order  that 
an  equivalent  could  be  secured  when  products  were  ex- 
changed for  them,  they  were  mere  representatives  of  the 
efforts  of  man.  But  the  mediums  had  to  have  names,  as 
did  the  products,  and,  as  words  were  originated  to  name 
them,  one  was  given  to  the  Unit,  and  others  to  its  mul- 
tiples and  subdivisions.  The  *'word''  that  was  used  to 
name  the  Unit  was  man's  subconscious  expression  of  his 
idea  of  the  Unit  of  his  efforts,  and  the  thing  which  bore 
the  name  of  the  Unit  Avas  the  concrete  representative  of 
his  subconscious  idea. 

If  the  value  of  the  product  must  be  determined  by  its 
utility,  usefulness,  or  use  should  not  that,  which  was  em- 
ployed as  its  equivalent  representative  in  effecting  ex- 
changes, have  relied  for  its  value  only  upon  its  utility, 
usefulness,  or  use,  and  not  upon  its  properties? 

Inasmuch,  however,  as  the  serviceable  value  of  the  me- 
diums dei>ended  upon  certain  worth  for  the  continuance 
of  their  acceptance  at  that  time,  it  was  imperative  thai 
those  things  be  choisen,  which,  by  reason  of  the  inherent 
worth  with  which  they  were  generally  regarded,  would 
make  their  acceptance  certain  and  stable. 

The  barbarian  was,  therefore,  compelled  in  his  practices 
to  consider  the  mediums  as  worth,  for  he  had  no  other 
alternative.  This  made  his  idea  of  worth  that  has  come 
doAvn  to  civilization  as  value — a  concretion. 

If  his  subconsciousness  that  he  used  the  mediums  as 
the  representatives  of  his  ideas  of  the  relation  that 
products  bore  to  each  other,  considering  the  efforts  ex- 
pended in  creating  the  products,  had  developed  into  con- 
sciousness, it  could  not  have  benefited  him,  for  he  could 
not  liave  escaped  the  demand  that  the  mediums,  to  be 
serviceable,  must  be  regarded  as  precious. 

Man,  as  a  civilized  being,  using  gold  and  silver  as 
mediums,  was  for  a  long  ])eriod  under  the  same  necessity 
of  so  regarding  them,  in  order  that  he  might  secure  the 


20  THE  EVOLUTIONS'   OF  MONEY. 

certainty  and  stability  in  use  that  is  so  essential ;  but 
in  practice  he  has  abandoned  that  idea,  though  it  is  re- 
tained in  theory  and  enforced  in  law,  until  it  creates 
jianics. 

In  his  practices  civilized  man  has  been  finally  com- 
pelled to  giye  expression  to  the  conclusion  of  his  subcon- 
sciousness that  money  is,  and  should  only  be,  issued  to 
conyey  ideas  of  the  relation  products  bear  to  each  other, 
considering  only  the  efforts  expended  in  creating  the 
products.  Therefore,  paper  currency  and  paper  credits, 
which  haye  no  intrinsic  worth,  but  are  mere  representa- 
tiyes  of  the  "words"  that  conyey  these  ideas  of  relation, 
conduct  97  per  cent  of  the  yolunie  of  business,  and  in  the 
higher  financial  centers  99^  per  cent;  and  there  is  now 
little  use  of  silver,  and  less  of  gold,  in  the  actual  conduct 
of  business. 

This  change  from  the  use  of  gold  and  silver  to  the  use 
of  paper  in  the  conduct  of  business  is  irresistible;  has 
taken  the  legal  tender  quality  from  silver,  and  has  lim- 
ited the  use  of  gold  and  its  representatives  to  the  conduct 
of  3  per  cent  and  less  of  the  volume. 

The  reason  for  this  change,  and  its  irresistible  trend, 
when  properly  understood,  will  explain  the  contention 
that  money  is  completing  its  evolution  from  concrete  sil- 
ver and  gold  coins,  as  standards  of  values,  to  mere  legal 
tender  paper  representatives  which  express  ideas  of  labor 
units,  as  standards  of  payment — becaui«;e  they  are  repre- 
sentatives of  "words"  that  are  the  standards  of  value. 


CHAPTER  II. 


M 


HE  change  from  the  use  of  tokens  by  the 
savages  to  the  use  of  mediums  by  the 
barbarians;  from  the  use  of  mediums  by 
the  barbarians  to  the  use  of  gold  and  silver  by 
civilized  man ;  and  the  change  to  the  exclusive  use 
of  gold,  was  made  upon  the  assumption  that  the  issue 
of  money  was  a  mechanical  art,  and,  therefore,  a  private 
right,  even  after  gold  and  silver  coins  had  to  be  given 
the  exclusive  right  to  the  power  of  legal  tender  to  make 
them  efficient  as  standards  of  valiieT  The  change  from 
the  use  of  gold  coin,  as  concrete  standards  of  value,  to 
the  use  of  paper  credits,  as  representatives  of  man's  con- 
cepts of  the  relation  of  products  to  each  other,  is  an  evo- 
lution which  has  progressed  so  far  in  the  practices  of  the 
people  that  it  must  receive  intelligent  recognition  in  the 
policies  and  laws  of  government,  if  revolution  is  to  be 
averted. 

The  mind  of  man  is  noAv  consciously  measuring  the 

worth  of  things,  as  it  has  heretofore  done  subconsciously ; 

and  concrete  intrinsic  value  standards  have  not  been  es- 

1      sential    since    the    power    of    goyernmentaI_  tender    was 

\     evolved  to  force  certaint}'  and  sta])ility  in  the  use  of  the 

)    standards  of  payment. 

These  are  not  idle  speculations,  but  an  exposition  of 
the  practices  of  the  people  that  have  never  received  any 
legal  recognition,  thougli  they  have,  in  a  sense,  been 
j)ointed  out  by  some  of  the  economists,  some  of  the  scien- 
tists, some  of  the  statesmen,  and  accepted  by  a  few 
'^jurists^ 

^  long  as  gold  and  silver  were  exclusively  used  in  ef- 


22  THE  EVOLVTIOy  OF  MONEY. 

fecting  exchanges,  the  demand  for  them  to  perform  such 
service  preserved  their  value. 

Man's  progrests  in  civilization  was,  therefore,  confined 
to  the  exchanges  that  could  be  effected  by  the  use  of  gold 
and  silver;  and  there  was  no  question  as  to  their  being 
the  best  standards,  so  long  as  certainty,  and  stability  of 
their  use  dejiended  upon  intrinsic  worth.  But  it  was 
early  in  the  history  of  the  race^decided  that  the  civiliza- 
tion of  that  portion  of  mankind  which  had  the  capacity 
to  diversify  occupations  to  the  point  of  specializa- 
tion, was  not  to  be  confined  to  the  civilization  that  could 
arise  from  exchanges  made  only  by  the  exclusive  use  of 
gold  and  silver. 

As  man  arrived  at  the  stage  of  civilization  where  gold 
and  silver  would  not  conduct  the  exchanges  necessary  to 
his  further  progress,  and  which  he  could  only  promote 
by  greater  diversity  of  occupations,  he  devised  methods — 
in  addition  to  the  use  of  gold  and  silver — for  the  conduct 
of  business. 

In  the  invention  of  devices  by  the  people  to  assist  or 
supersede  the  use  of  gold  and  silver  in  their  practices, 
the  highest  order  of  genius  has  been  shown. 

In  the  policies  and  principles  of  government  that  regu- 
late the  use  of  these  devices  may  be  seen  the  stupidity, 
cupidity,  and  ruthless  ignorance  of  the  barbarian. 

The  history  of  the  origin  of  these  devices  may  be  stated 
as  follows :  In  some  localities  little  or  none  of  the  metals 
could  be  retained,  and  the  people  having  once  been  served 
by  their  use,  refused  to  substitute  anything  in  their  stead ; 
or,  being  under  the  power  of  some  form  of  government, 
were  not  permitted  to  do  so,  and  their  occupations  being 
too  diversified  to  efficiently  permit  exchanges  by  barter, 
they  resorted  to  the  use  of  oral  credits,  or  verbal  promises. 

Verbal  promises,  or  oral  credits,  could  not  be  safely 
assigned  or  transferred,  and,  as  the  liquidation  of  verbal 
credits  was  as  essential  then  as  is  the  liquidation 
of  paper  credits  now,  there  was  devised  a  method  of  set- 


THE  EVOLUTION  OF  MONEY.  23 

tlement  that  was  the  germ  of  bauks  of  deposit,  discount, 
exchange  and  issue,  where  settlements  are  made  today. 

The  method  devised  was  weekly  or  monthly  fairs,  where 
all  the  people  assembled  to  trade,  and,  at  the  same  time, 
swap  or  adjust  their  oral  debts  and  credits,  until  there 
was  as  near  a  settlement  as  could  be  reached  by  such  a 
method.  In  the  course  of  time  there  was  developed  those 
who  specially  attended  to  the  adjustment  of  the  credits 
and  debts  of  others,  and  as  brokers  of  those  credits  and 
debits,  they  were  the  progenitors  of  banks  of  credit. 

The  oral  method  of  conducting  exchanges — as  it  was 
assisted  b}^  such  gold  and  silver  as  could  be  secured — con- 
tinued until  the  art  of  writing  was  discovered,  when  it 
was  enlarged  by  the  use  of  bank-credits. 

The  scarcit}'  of  gold  and  silver,  and  the  loss  from  abra- 
sion, sweating,  land  and  sea  thieves  made  the  use  of  the 
metals  .so  unsatisfactory,  and  so  hazardous,  that  it  became 
essential  to  devise  a  method  whereby  a  safe  deposit  of  the 
metals  could  be  made  and  a  credit  received  which  could 
be  used  as  a  substitute.  This  was  done  by  the  system  of 
mediaeval  banks  originated  to  hold  the  deposits,  and  pro- 
vide for  the  use  of  the  credits. 

The  banks,  therefore,  received  the  gold  and  silver  of 
the  people,  gave  them  a  credit  upon  books  kept  for  that 
purpose,  with  the  right  to  transfer  any  part  of  it  by  ap- 
pearance at  the  bank,  and  agreement  to  and  acceptance  of 
the  transfer.  These  credits  were  based  upon  the  gold  and 
silver  in  the  banks ;  and  in  the  use  made  of  them  to  etfect 
exchanges,  served  as  the  substitutes  of  gold  and  silver. 

Since  they  were  based  upon  the  metals,  the  value  of 
their  service,  i.  e.,  their  "use-value,"  was  the  same  as  the 
value  of  the  service,  or  the  so-called  intrinsic-value,  of  the 
gold  and  silver  they  represented,  so  long  as  the  metals 
were  kept  in  the  banks.  The  use  of  the  credits  was  so 
much  safer  than  the  use  of  the  gold  and  silver,  that  they 
met  with  general  favor,  and  the  banks  multiplied. 


24  THE  EVOLUTION  OF  MONEY. 

The  chief  necessity  of  tlie  people  was  a  suflQcieut  num- 
ber of  mediums  of  exchange;  and  since  the  civilization 
of  that  period  had  not  developed  either  printing,  paper, 
or  the  idea  of  the  govenimcnt  conipelling  printed  pieces  of 
paper  to  serve  as  solvents  of  debts,  it  was  necessary  to 
secure  certainty,  and  stability  of  service,  by  basing  it,  as 
in  the  case  of  bank-credits,  upon  gold  and  silver. 

This  must  be  the  origin  of  the  idea  that  paj)er  currency 
should  have  no  ^'use-value,"  unless  it  is  based  upon,  or 
redeemable  in,  intrinsic-value  metal. 

The  safer,  more  efficient,  and  more  expeditious  use  of 
the  bank-credits,  than  could  be  made  of  the  gold  and 
silver,  was  highly  appreciated;  but  though  the  enlarged 
and  more  efficient  use,  i.  e.,  service,  of  the  bank-credits 
added  to  the  value  of  the  metals,  that  service  was  never 
regarded  as  any  part  of  the  value  of  gold  and  silver. 

The  Bank  of  Amsterdam  was  a  remarkable  illustration 
of  this  fallacy,  and  demonstrated  in  its  experience  that 
when  credits  are  compelled — by  the  force  of  opinion  or  of 
law — to  rely  upon  the  properties  of  gold  and  silver,  and 
not  upon  the  power  of  "Tender,"  for  the  value  of  their 
service,  or  their  ''use-value,"  it  is  an  error  that  is  criminal 
in  its  results. 

The  gold  and  silver  was  deposited  in  the  Bank  of  Am- 
sterdam under  the  agreement  that  it  was  never  to  be 
withdrawn,  and  that  the  metals  were  to  be  forever  kept 
in  the  vaults  of  the  bank  to  preserve  the  value  of  the  use, 
or  the  ''use-value,"  of  bank-credits.  The  custodians  of 
the  deposits,  /.  e..  Bank  Managers,  were  to  be  elected  by  the 
people  of  the  city  every  two  years.  For  one  hundred  years 
deposits  were  made  by  the  people,  and  safely  kept  in  the 
vaults.  During  this  period  the  i^eople  prospered  beyond 
what  they  could  have  done  by  the  use  of  gold  and  silver. 
When  the  bank  had  been  in  operation  one  hundred 
years,  the  yield  of  the  precious  metals  ceased,  or  for  some 
other  reason  the  people  were  unable  to  secure  a  quantity 
sufficient  to  furnish  the  additional  bank-credits  needed  to 


THE  EVOLlTIOy  OF  MOUSEY.  25 

conduct  tlie  increasiug  volume  of  business,  and  preserve 
the  progress  of  tlieir  civilization. 

There  is  one  peculiar  thing  about  civilization.  It  will 
not  remain  stationary.     It  either  advances  or  recedes. 

It  will  not  advance  unless  the  volume  of  business  en- 
larges ;  the  volume  of  business  cannot  enlarge  unless  more 
exchanges  are  effected,  and  more  exchanges  cannot  be 
made  unless  the  mediums,  with  which  the  exchanges  are 
effected,  are  increased.  Therefore  the  prosperity  and  Avel- 
fare  of  the  people  of  Amsterdam,  and  the  surrounding 
country,  depended  upon  the  increase  of  the  bank-credits. 
The  credits  could  not  be  increased  Avithout  additional  gold 
and  silver,  and  additional  gold  and  silver  might  not  be 
had,  for  the  available  supply  was  in  the  vaults. 

The  intelligence  of  that  civilization  was  presented  with 
the  necessity  of  doing  something  to  preserve  its  pros- 
perity. 

Under  the  intrinsic-value  theory  the  deposits  could  not 
be  removed  from  the  vaults,  and  placed  in  circulation 
again  so  that  it  might  be  used  to  secure  additional  credits, 
for  the  removal  of  the  deposits  would  destroy  the  value 
of  the  use,  or  the  "use-value''  of  all  the  credits. 

There  were  two  ways  in  which  the  deposits  might  be 
used  to  enlarge  the  credits,  and  save  the  declining  pros- 
pei'ity  :  One  was  honest — the  other  dishonest,  and  a  crime 
against  humanity — but  both  justified  by  the  same  motive, 
i.  e.,  the  desire  to  preserve  the  happiness  and  prosperity 
of  the  people.  The  dei)osits  might  have  been  secretly  re- 
moved, and  so  judiciously  used  in  the  i)ayment  of  public 
debt,  making  i)ub]ic  improvements,  and  otherwise  so  ex- 
l^ended  for  the  general  welfare  of  all  the  people  that  when 
the  secret  became  known,  they  would  have  been  Avilling 
to  deposit  more  gold  and  silver  to  be  similarly  used,  ])ro- 
vided  the  government  would  make  the  bank-credits  receiv- 
able, or  a  full  tender,  in  the  payment  of  debt. 

That  would  have  been  in  its  motives,  its  actions,  and 
its  results,  an   honest  and  beneficial,  though   secret,  re- 


26  TEE  EVOLUTION  OF  MONEY. 

moval  of  the  deposits,  even  under  the  intrinsic-value  sys- 
tem. 

The  other  way  would  have  been  for  the  managers  to 
secretly  remove  the  deposits,  or  so  much  as  might  be 
necessary  to  secure  the  needed  credits,  and  expend  them 
in  their  own  personal  interest  in  the  hope  that  they  could 
thereby  the  better  preserve  the  secret,  and  preserve  the 
'^use-value"  of  the  bank  credits,  but  it  would  have  been 
theft,  however  much  it  might  have  benefited  the  people. 

In  one  case  it  would  have  been  a  wise,  judicious,  and 
honest  expenditure  of  the  deposits  in  the  equal  interest 
of  all  the  people;  and  if  only  enough  of  the  deposits  had 
been  removed  to  supply  the  additional  bank-credits  needed 
it  would  have  preserved  the  ''use-value"  of  all  the  bank- 
credits,  while  demonstrating  the  fallacy  of  the  intrinsic- 
value  system. 

In  the  other  case  it  would  be  robbery  of  the  people,  be- 
cause, however  pure  the  motives  in  secretly  removing  the 
deposits,  and  however  much  it  may  have,  at  first,  enured 
to  the  benefit  of  the  people,  the  fact  that  it  was  to  be  ex- 
pended in  the  personal  interest  of  the  managers  of  the 
bank  would  arouse  those  passions  of  avarice  which  would 
cause  them  to  lose  all  consideration  for  the  welfare  of  the 
people,  and  degenerate  into  thieves  who  would  steal  every- 
thing they  could  lay  their  hands  upon. 

The  history  of  the  bank  is  that  the  managers  not  only 
secretly  removed  enough  of  the  deposits  to  secure  all  the 
additional  credits  needed  to  ensure  the  continued  pros- 
perity of  the  people,  but  they  stole  the  accumulated  de- 
posits of  a  hundred  years,  and  preserved  the  secret. 

They  lost  all  regard  for  the  welfare  of  the  people,  and 
for  fifty  subsequent  years  continued  to  steal  the  deposits 
— preserving  the  secret — until  they  had  caused  such  an 
immense  number  of  credits  to  be  entered  upon  the  books 
that  they  became  so  cheap  it  was  to  the  interest  of  the 
thieves  to  expose  the  secret  and  destroy  their  use  alto- 
gether. 


THE  EVOLUTIOy  OF  MOyEY.  27 

The  Bank  of  Venice  was  a  still  stronger  illustration  of 
the  fallacy  of  intrinsic-value;  and  the  efficient  and  safe 
use  made  of  the  credits  of  that  institution  demonstrates 
the  truth  of  the  contention  that  it  is  the  value  of  the  use, 
and  not  the  inherent  value  of  tlie  thing  tchich  serves  the 
use,  that  dominates,  as  standards,  in  the  conduct  of  busi- 
ness. 

The  experience  of  this  bank  demonstrates,  in  its  prac- 
tices, that  when  gold  and  silver  were  separated  from  their 
use,  as  money,  the  separate  and  naked  use  of  the  bank- 
credits  was  more  efficient,  more  stable,  and  more  valuable 
than  gold  and  silver;  and  when  the  bank-credits  and  the 
gold  and  silver  coins  were  jointly  used,  the  use,  /.  e.,  serv- 
ice, of  the  bank-credits  was  more  valuable  than  the  com- 
bined inherent  worth  of  the  metals,  and  any  use,  /.  e,, 
service,  that  could  be  made  of  them.  This  demonstration 
in  practice  of  the  dominance  of  the  separate  and  indeijend- 
ent  use  of  the  bank-credits  was  due  to  that  scientific  use  of 
the  legal  tender,  or  sovereign  power,  always  displayed 
when  it  is  necessary  for  a  people  to  preserve  their  liberty. 

The  Eepublic  of  Venice,  a  wealthy  commercial  city,  but 
as  weak  in  warlike  defense  as  it  was  strong  commercially, 
was  threatened  by  formidable  enemies;  and  if  successful 
defense  was  made,  it  could  only  be  done  by  the  Free  Com- 
panies which  infested  Europe  at  that  time,  and  sold  their 
services  to  the  highest  bidders.  The  necessary  funds  were 
raised  by  the  organization  of  the  Bank  of  Venice.  All  the 
wealthy  citizens  were  forced  to  lend  their  precious  metals, 
jewels  and  valua])les  to  the  bank,  receiving  in  exchange 
only  an  interest-bearing  credit  on  the  books  of  the  bank. 
The  deposits  were  not  to  be  held  in  the  bank  to  secure 
the  value  of  the  use,  or  the  ''use-value"  of  the  credits,  but 
they  were  to  be  employed  to  purchase  the  assistance  of 
the  Free  Companies  to  defend  the  "Republic. 

Permission  was  given  the  people  to  use  the  bank-credits 
in  the  conduct  of  their  business ;  and  to  make  their  service 
efficient,  it  was  provided  that  transfer  of  the  credits  might 


28  THE  EVOLUTION  OF  MONEY. 

be  made  to  each  other  upon  the  books  of  the  bank  in  any 
amount,  however  small. 

The  service  the  bank-credits  might  render  depended 
upon  the  patriotism  of  the  people,  the  hope  that  the 
interest  would  be  paid  yearly,  and  the  credits  some  time 
in  the  future;  and  did  not — as  in  the  case  of  the  Bank 
of  Amsterdam — depend  upon  the  gold  and  silver  in  the 
vaults,  for  it  was  paid  out. 

The  use  that  the  people  made  of  the  bank-credits — 
though  only  permissive — was  so  much  more  valuable  than 
gold  and  silver,  or  any  use  that  could  be  made  of  them, 
that  the  credits  commanded  a  premium  over  the  coins  of 
those  metals.  The  use  made  of  the  credits  was  so  inces- 
sant that  in  the  course  of  time  the  people  ceased  to  collect 
the  interest;  and  as  the  credits  commanded  a  premium 
over  gold  and  silver  coins,  there  was  no  demand  for 
their  redemption. 

The  question  of  the  payment  of  the  bank-credits  was 
never  raised,  but,  on  the  contrary,  the  government  passed 
laws  to  reduce  the  premium. 

The  bank  was  organized  in  the  eleA'enth  century,  and 
when,  in  the  fourteenth  century,  it  was  realized  that  the 
people  had  long  since  ceased  to  collect  the  interest  on  the 
bank-credits ;  that  the  u^se  of  the  credits  was  more  valuable 
than  the  gold  and  silver  coins;  and  that  the  government 
would  not  be  allowed  to  pay  the  bank-credits  so  long  as  it 
j)ermitted  the  people  to  use  them  in  the  conduct  of  busi- 
ness, the  conclusion  was  forced  upon  the  officers  of  the 
government,  and  the  managers  of  the  bank,  that  the  value 
of  the  naked  use,  /.  e.,  service,  of  the  credits  had  been 
such,  that  in  practice,  in  law,  and  in  theory  the  debt  had 
been  paid,  //  the  continuance  of  the  use  of  the  credits  to 
liquidate  debt  was  permitted. 

As  this  conclusion  asserted  itself,  the  value  of  the  use 
of  the  credits  was  fully  appreciated,  and  taken  advantage 
of  to  increase  the  receipts  of  the  government,  decrease  the 
jiremiums  of  the  bank-credits,  and  automatically  furnish 


TEE  EVOLUTION  OF  MONEY.  29 

the  people  with  safe,  stable,  and  efficieut  instruments  to 
effect  their  ever-increasing  volnnie  of  exchanges. 

This  was  accomplished  b}'  a  law  in  the  fourteenth  cen 
turv,  which  gave  certain  coins  of  gold  and  silver  the  ex- 
clusive right  to  purchase  additional  credits  from  the 
bank;  and  to  sustain  and  support  the  "use-value"  of  all 
the  credits,  the  law  provided  that  the  bank-credits  should 
have  the  exclusive  right  to  pay  all  debts  in  the  larger,  or 
wholesale,  transactions. 

The  use  of  the  credits  from  the  eleventh  to  the  four- 
teenth century — though  only  permissive — had  shown  an 
efficiency  that  liquidated  the  debt;  made  the  credits 
more  valuable  than  the  the  gold  and  silver  coins,  and 
Venice  the  commercial  mistress  of  the  world,  and,  there- 
fore, their  use  would  not  be  affected  by  the  increase  of  the 
volume  of  their  issue,  if  they  were  given  the  exclusive 
right  of  tender  in  the  payment  of  all  debts  in  the  larger 
or  wholesale  business ;  and  certainly  not,  when  the  pur- 
chase of  the  additional  credits  was  limited  to  certain 
coins.  The  limitation  of  the  right  to  purchase  the  credits 
to  certain  coins,  enabled  the  bank  to  control  the  volume  of 
credits;  and  the  right  must  have  been  wisely  confined  to 
certain  Venetian  coins,  for  the  history  of  the  bank  to 
1792 — when  it  was  destroyed  by  Napoleon — shows,  with 
but  few  exceptions,  the  credits  commanded  a  premium 
over  the  coins. 

The  use  of  the  credits  of  the  Bank  of  Amsterdam  had 
been  highly  beneficial  to  those  people  for  150  years,  and 
they  could  well  afford  to  pay  the  price  exacted — in  the 
theft  of  their  deposits — if  the  custodians  had  so  judi- 
ciously stolen  the  deposits  as  to  have  preserved  the  value 
of  the  use  of  the  credits  to  the  i)eople;  but  the  reckless- 
ness and  ruthlessness  of  the  ignorant  avarice,  which  stole 
and  used  the  deposits,  was  such  it  operated  to  destroy 
the  "use-value"  of  all  the  credits.  The  crime  committed 
against  those  people  was  the  destruction  of  the  "use- 
value"   of   the   bank-credits — whicli    was   caused   bv   the 


30  THE  EVOLUTION  OF  2I0NEY. 

theft  of  the  metal  upon  which  the  credits  were  erroneously 
based.  This  crime,  in  varying  forms  of  disguised  dishon- 
esty, has  since  been  often  committed,  and  will  continue  to 
be  committed  >so  long  as  the  intrinsic-value  system  is  re- 
tained in  the  policies  of  governments,  and  enforced  upon 
the  practices  of  the  people. 

In  the  case  of  the  Bank  of  Venice  the  deposits  were  not 
stolen,  but  expended  in  defraying  the  expenses  of  the  gov- 
ernment; and  the  use  of  the  credits  was  not  destroyed, 
but  made  more  elHcient,  more  serviceable,  and  more  val- 
uable than  the  gold  and  silver  coins. 

The  advantage  that  accrued  to  the  people  of  Venice, 
over  and  above  that  which  accrued  to  the  people  of  the 
City  of  Amsterdam  in  the  use  of  similar  bank-credits,  was 
solely  due  to  the  adoption  by  the  Eepublic  of  Venice  of 
the  "use-value"  theory  of  issuing  money,  instead  of  the 
intrinsic-value  theory  adopted  by  the  Bank  of  Amster- 
dam; and  the  only  difference  between  the  two  systems 
was  in  the  methods  by  which  the  service  of  the  bank- 
credits  were  made  efficient,  valuable,  and  stable. 

The  credits  of  the  Bank  of  Amsterdam  were  made  cer- 
tain and  stable  in  use  by  the  retention  of  the  gold  and 
silver  in  the  vaults  of  the  bank,  which  is  the  essential  re- 
quirement of  the  intrinsic-value  system. 

The  use  of  the  credits  of  the  Bank  of  Venice  were  made 
certain  and  stable  only  by  the  faith  that  the  interest  on 
the  debt  would  be  promptly  met;  by  the  faith  that  the  debt 
would  be  eventually  paid,  and  by  the  singular  permission, 
and  provision,  in  the  beginning,  that  the  credits  might  be 
used  in  the  conduct  of  their  business,  and,  subsequently, 
by  giving  them  the  exclusive  right  to  pay  all  obligations 
in  the  wholesale  or  larger  business. 

This  method  of  using  the  bank-credits  as  a  local  cur- 
rency, while  gold  and  silver  were  dissipated  in  paying 
for  the  defense  of  the  country,  was  a  device  that  depended 
for  its  success  upon  the  patriotism  of  the  people,  and 
the  legal  tender  power,  and  is  the  "'use-value''  system. 


THE  EVOLUTION  OF  AIONEY.  31 

To  the  extent  that  the  bank-credits  exercised  the  ex- 
clusive right  to  pay  debts,  the  practice  was  a  contribu- 
tion to  the  Science  of  Finance,  for  it  was  a  substitution 
of  the  ''use-value''  for  the  intrinsic-value  theory — a  substi- 
tution which  must  be  made  by  this  government  to  con- 
form its  policies  to  the  practices  of  the  people. 


CHAPTER  III 


ITH  the  exception  of  the  seemingly  abnormal 
practices  originated  by  the  necessities  which 
demanded  the  organization  of  the  Bank  of 
Venice,  there  was  no  additional  infringement  upon  the  in- 
trinsic-value system  by  the  "use-value"  practices  of  the 
people. 

The  art  of  writing  had  enabled  the  people  to  make 
many  of  their  exchanges  by  the  use  of  notes,  drafts,  bills 
payable,  warehouse  receipts,  acceptances,  bills  of  lading, 
and  other  devices  employed,  and  their  use,  though  cum- 
brous and  in  many  cases  unsatisfactory,  had  enlarged  the 
volume  of  business. 

The  progress  of  the  people  was  dependent  upon  the 
number  of  their  exchanges ;  the  number  of  their  exchanges 
was  dependent  upon  the  efficiency  of  the  written  devices; 
the  efficiency  of  the  devices  was  dependent  upon  their 
prompt  settlement,  adjustment  and  payment,  and  it  was, 
therefore,  necessary  to  use  gold,  silver,  and  the  bank- 
credits  to  ensure  the  settlement  of  those  written  devices 
that  would  not  be  accepted  in  liquidation  of  debt.  Since 
it  was  not  known  which  written  devices  would,  and 
which  would  not,  be  received  as  liquidators  of  obligations, 
it  was  arranged  for  all  of  them  to  be  payable  in  gold  and 
silver,  so  that  when  any  of  them  became  worthless  demand 
could  be  made  that  they  be  so  paid. 

The  bank-credits,  as  substitutes  for  gold  and  silver, 
having  demonstrated  that  they  could  be  used  to  settle, 
adjust,  and  pay  a  much  larger  amount  of  the  written  obli- 
gations than  could  be  done  by  the  use  of  gold  and  silver, 
I  lie  metals  were  more  and  more  used  as  a  base  for  bank- 
credits. 

As  the  supply  of  gold  and  silver  increased,  the  bank- 


THE  EVOLUTION  OF  MONEY.  33 

credits  increased,  until  tliey  finalh',  in  great  part,  super- 
seded the  use  of  coins  in  the  practices  of  the  people.  This 
diversified  occupations,  exjjedited  exchanges,  and  enlarged 
the  volume  of  business,  until  it  produced  the  civilization 
that  developed  printing,  and  the  manufacture  of  paper. 
With  the  use  of  writing,  printing,  and  paper  the  people 
were  enabled  to  originate  such  a  variety  of  devices  for 
effecting  exchanges,  and  they  issued  them  in  such  number 
in  conducting  the  increasing  volume  of  busiuess,  that  gold 
and  silver  could  not  be  found  in  sufficient  quantity  to  sup- 
port the  bank-credits  necessary  to  promptly  settle,  adjust, 
and  pay  the  obligations. 

Civilization  was  not  to  be  stopped  in  its  onward  march 
by  a  scarcity  of  gold,  silver,  and  bank-credits,  and  addi- 
tional devices  had  to  be  developed  to  supply  the  necessary 
instruments  to  settle,  adjust,  and  jjay  the  many  and 
varied  obligations  issued  by  the  people  in  effecting  their 
increasing  exchanges. 

The  device  now  adopted  was  the  expansion  of  banks-of- 
credit  into  banks  of  deposit,  discount,  and  exchange  with 
authority  to  issue  notes  based  upon  gold  and  silver — to 
be  used  as  the  credits  had  been  used. 

The  change  from  the  use  of  credits  to  the  use  of  notes 
was  for  the  purpose  of  increasing  the  instruments  used 
to  settle,  adjust,  or  pay  the  obligations  not  otherwise 
liquidated.  The  number  of  instruments  could  not  be  in- 
creased under  the  intrinsic-value  theory,  if,  like  the  credits, 
the  noteis  were  issued  only  in  equal  amounts  of  "use-value" 
with  the  value  of  the  gold  and  silver  on  which  they  were 
based.  Therefore,  it  Avas  necessary  to  authorize  the  banks 
to  issue  three,  or  more,  times  as  much  "use-value"'  in  notes 
as  the  value  of  the  gold  and  silver  held  in  the  banks. 

A  note,  therefore,  represented  only  one-third,  or  less,- 
of  the  value  of  the  metal  in  the  l^ank  on  which  it  was  is- 
sued; and  yet  each  note  was  intended  to  represent,  in  its 
use,  /.  c.  service,  the  full  value  of  the  gold  or  silver  coin  on 
which  the  three  or  more  notes  were  issued;  but  when  the 
8 


34  THE  EVOLl'TIOX  OF  MOyEY. 

same  amount  of  gold,  or  silver,  was  in  circulation,  liqui- 
dating the  obligations  of  the  people,  its  "use-value"  was 
only  equal  to  the  "use-value''  of  one  of  the  three  or  more 
notes  which  had  been  issued  on  an  equal  amount  of  gold 
or  silver  in  the  bank.  As  an  economic  consequence  gold 
and  silver  disai^peared  from  circulation,  and  were  only 
used  to  support  the  "use-value"  of  notes,  and  for  com- 
modity imrposes. 

Having  surrendered  their  use,  as  money,  to  the  bank 
notes,  gold  and  silver  had  to  rely  upon  their  commodity 
properties,  and  the  demand  for  them  as  supporters  of 
bank-notes,  for  any  value  they  might  have. 

As  long  as  gold  and  silver  were  so  scarce  that  the  sup- 
ply would  not  meet  the  demand  to  support  bank-notes, 
they  retained  their  assigned,  which  is  claimed  to  be  their 
intrinsic,  value  because  their  use  to  support  bank-notes 
gave  them  a  larger  service,  /.  c.  a  higher  value,  than  all 
other  uses  to  which  they  could  be  put. 

But  after  the  supply  more  than  met  the  demand  to 
support  bank-notes,  the  surplus  was  compelled  to  rely 
upon  its  commodity  purposes  for  its  value;  and  if  the 
demand  did  not  keep  the  value  of  the  surplus  equal  ta 
the  value  of  the  metal  in  the  banks,  as  it  was  represented 
by  the  "use-value"  of  the  notes,  it  receded  in  value,  until 
its  n\(x<t  profitable  use  was  its  service  in  competing  with 
the  bank-notes  in  paying  the  obligations  of  the  people. 

When  the  surplus  gold  and  silver  could  not  be  more 
profitably  employed  than  in  competition  with  the  bank- 
notes, its  value  was  on  an  equality  with  the  value  of  the 
use,  or  the  ''use-value"  of  the  notes. 

There  can  be  no  difference  between  the  so-called  intrin- 
sic-value of  similar  amounts  of  gold,  or  similar  amounts 
of  silver,  when  in  the  banks  and  in  circulation ;  and  since 
the  intrinsic-value  of  a  surplus  coin  was  not  equal  to  the 
''use-value"  of  one  of  the  notes  issued  upon  a  similar  coin 
and  found  its  most  profitable  employment,  and,  therefore, 
its    highest   value,   competing   with   the   bank-notes,   the 


THE  EVOLUTIOX  OF  3I0XEY.  35 

« 
claimed  intrinsic-value  of  the  coin  in  the  bank,  which  was 
only  equal  to  the  Aahie  of  the  coin  in  circulation,  was  only 
equal  to  the  use-value  of  one  of  the  three  notes  that  had 
been  issued  upon  it. 

Under  such  conditions  it  was  difficult  to  determine 
what  was  value,  since  gold  and  silver,  the  so-called  stand- 
ards of  A'alue,  had  at  the  same  time  ditferent  and  varying 
values,  if  value  in  the  use  made  of  gold  and  silver  and 
their  substitutes,  in  paying  the  obligations  of  the  people, 
is  considered  one  of  the  qualities  of  value. 

Gold  and  silver  coins  had  so  much  claimed  intrinsic- 
value  ill  a  honk  that  it  was  regarded  safe  to  issue  three 
bank-notes,  each  to  represent  as  much  '"use-value"  as  the 
value  of  the  gold  or  silver  coin,  and  at  the  same  time  an 
equal  gold  or  silver  coin,  when  forced  into  circulation, 
had  such  little  value  that  it  was  compelled  to  compete 
with  the  notes  for  the  highest  value  it  could  command. 

The  result,  in  practice,  of  this  condition  was  that  gold 
and  silver  had  a  value  more  than,  equal  to,  or  less  than 
the  "use-value"  of  the  bank-notes — and  since  the  necessi- 
ties of  the  people  and  the  inefficiency  of  gold  and  silver — 
comi)elled  the  change  from  the  use  of  gold  and  silver  to 
the  use  of  bank-notes,  Ihe  so-called  intrinsic-value  of  the 
metals  depreciated  until  it  was  less  than  the  ''use-value" 
of  the  bank-notes,  and  they  were  no  longer  readily  and 
willingly  accepted  in  jiayment. 

The  enforced  surrender  by  gold  and  silver  coin  of  their 
"use- value"  to  the  bank-notes,  having  demonstrated  that  the 
value  which  the  people  i)rized  so  dearly  was  use,  or  serv- 
ice, not  intrinsic-value,  something  had  to  be  done  to  re- 
gain for  gold  and  silver  that  supposed  intrinsic-value 
wliich  they  lost,  when  they  lost  their  exclusive  right  to 
be  used  in  paying  the  obligations  of  the  people. 

Tt  was  not  desired  that  gold  and  silver  should  regain 
their  so-called  intrinsic-value  for  any  reason,  other  than 
to  make  them  as  readily  acce})table  in  Ihe  liquidation  of 
debt  as  thev  had  heretofore  been. 


36  '^'liE  EVOLUTloy  OP  MONEY. 

m 

It  was  sii Imposed  all  that  was  necessary  to  restore  that 
regard  for  them  was  to  endow  them  with  the  quality 
which  would  make  them  again  readily  and  willingly  re- 
ceivable in  the  payment  of  debt,  notwithstanding  it  had 
been  demonstrated  they  were  no  longer  fitted  for  the  use, 
and  could  not  be  made  to  serve  the  purpose. 

It  was  ascertained  that  this  regard  for  their  supposed 
intrinsic-value  might  only  be  restored  by  the  power  of 
government,  which  compels  their  acceptance  in  full  liqui- 
dation of  debt,  at  such  valuation  as  the  government  might 
assign  the  metals.  This  power  of  government  is  known 
as  Legal-Tender,  and  after  gold  and  silver  were  endowed 
with  the  exclusive  monopoh'  of  the  exercise  of  that  power, 
it  was  thought  that  any  value  given  them  could  be  sus- 
tained, as  intrinsic-value,  so  long  as  the  government  could 
enforce  its  power. 

The  ''use-value"  given  gold  and  silver  coin  by  the  power 
of  Legal-Tender  has  never  been  admitted  to  be  any  part 
of  their  value,  but  all  their  value  has  been  fatuously,  ig- 
norantly,  and  avariciously  attributed  to  their  inherent 
or  intrinsic  qualities,  or  properties. 

Instruments  which  would  be  readily  received,  at  an 
assigned  value,  were  essential  to  the  safe  and  prosperous 
conduct  of  business;  and  since  gold  and  silver — the  final 
effort  of  the  individual's  ingenuity  in  issuing  money,  as  a 
mechanical  art,  could  no  longer  be  utilized,  it  was  nat- 
ural that  collective  man,  i.  e.,  government,  should  under- 
take to  provide  them. 

It  was  not  so  apparent  then  as  it  became  afterwards 
what  it  was  the  government  was  called  upon  to  do.  It 
was  not  realized  then,  as  it  has  since  been,  that  the  people 
conduct  their  exchanges  by  the  use  of  the  many  and 
various  devices,  issued  as  obligations. 

Since  the  art  of  printing,  and  the  manufacture  of  paper 
has  been  fully  appreciated,  the  devices  of  the  people — in 
the  issue  of  their  obligations  to  efi'ect  exchanges — has 
proven  equal  to  any  emergency  that  arose  in  the  conduct 


THE  EVOLVTIOX  OF  MONEY.  37 

f;f  business,  however  comj)lex  the  exchanges;  and  the 
trouble  has  been — not  to  develop  the  devices — but  to  pro- 
vide waviS  and  means  for  their  settlement  or  payment  so 
that  they  might  not  cause  a  loss. 

The  devices  issued  by  the  people,  as  obligations,  as 
well  as  the  instruments  used  to  liquidate  the  obligations 
that  had  lost  their  use-value,  had  their  use,  or  service, 
and  that  use,  or  service,  was  the  essential  one  of  expe- 
diting exchanges — which  they  did  so  long  as  they  retained 
their  use-value. 

If  all  the  people  were  honest,  and  none  unfortunate, 
the  obligations  issued  in  the  conduct  of  business  would 
be  all  that  was  necessary;  for  the  certainty  that  all  would 
be  settled  would  preserve  the  value  of  their  use,  or  their 
"use-value."  But  the  consideration  that  some  of  the  people 
are  dishonest,  and  more  unfortunate ;  and  in  the  one  case 
will  not,  and  in  the  other  cannot,  meet  their  obligations, 
makes  it  necessary  for  the  government  to  provide  instru- 
ments which  will  be  received  in  full  satisfaction,  since 
gold  and  silver  would  no  longer  be  received  on  their  in- 
trinsic merit. 

The  instruments  furnished  by  the  government  should, 
therefore,  be  official  representatives  of  the  same  things 
that  the  obligations  of  the  people  are  private  representa- 
tives of;  especially  since  they  are  issued  to  act  as  manda- 
tory substitutes  of  the  obligations  of  the  people,  when  the 
obligations  become  worthless  and  lose  their  '"use-value." 

It  is  a  credit  to  the  honesty  of  man,  and  to  his  capacity 
for  protecting  his  interests  against  the  dishonesty  of  some 
and  the  insolvency  of  others,  that  the  official  substitutes 
are  not  needed  to  conduct  more  than  ?>  ])er  cent  of  the 
volume  of  business ;  and  in  the  higher  financial  centers, 
either  honesty  or  sagacity,  or  the  two  combined,  is  such 
that  official  substitutes  are  not  used  to  conduct  but  one- 
half  of  one  per  cent  of  the  volume,  ev^en  imder  the 
intrinsic-value  system. 

When  governments  were  first  called  upon  to  do  that  for 


389032 


38  THE  EVOLUTION  OF  MONEY. 

the  people  which  the  individual  could  uo  longer  do,  viz: 
furnish  safe,  sane,  and  sound  instruments  to  be  used  in 
the  settlement  of  the  obligations  of  the  people,  it  was 
perhaps  natural  and  proper  that  gold  and  silver  (consid- 
ering their  use  for  so  long  a  time,  and  that  they  had  only 
lost  their  value  by  the  loss  of  that  use ) ,  should  be  given  the 
exclusive  right  to  the  legal-tender  power.  But  even  after 
they  were  given  this  right,  they  were  so  cumbrous  and  so 
scarce,  they  could  not  be  made  to  efficiently  sen'e  the 
use,  and  had  to  be  given  the  additional  right  to  issue 
palmer  representatives. to  act  as  substitutes  for  them. 

The  paper  obligations  of  the  people,  as  they  liquidated 
each  other  on  the  books  of  account,  proved  so  much  more 
equitable,  efficient,  and  expeditious  than  the  paper  repre- 
sentatives of  gold  and  silver,  that  the  demand  for  gold, 
silver,  and  their  paper  representatives — bank-notes — was 
decreased — until  they  were  only  used  in  the  conduct  of 
the  cash  system,  to  settle  the  balances  in  the  bookkeeping 
or  credit  system  of  conducting  business,  and  as  substi- 
tutes for  the  credits  of  the  people,  when  they  had  lost 
their  "use-value." 

The  two  combined,  /.  e,.  gold  and  silver,  and  their  bank- 
notes, do  not  conduct  3  per  cent  of  the  volume  of  busi- 
ness; and  their  use  would  grow  less,  if  the  dishonesty 
and  avarice  of  those  who  control  their  issue  could  be  elim- 
inated under  the  intrinsic-value  system. 

The  change  from  the  use  of  gold  and  silver,  as  mediums 
of  exchange,  to  bank-credits,  as  substitutes  for  gold  and 
silver;  from  the  use  of  bank-credits,  as  substitutes  of  gold 
and  silver,  to  bank-notes,  as  representatives  of  gold  and 
silver;  from  bank-notes,  as  representatives  of  gold  and 
silver,  to  the  use  of  the  written  obligations  of  the  j)eople, 
until  the  intrinsic-value  of  gold  and  silver  receded  below 
the  "■use-value"  of  the  bank-notes,  and  they  became  uncer- 
tain as  standards,  has  long  since  been  accomplished. 

The  change  from  the  use  of  the  uncertain  and  unstable 
intrinsic-value  gold  and  silver,  to  the  use  of  gold  and 


TEE  EVOLUTION  OF  MONEY.  39 

silver,  impressed  with  the  legal-tender  power  to  ensure 
their  acceptance,  as  standards;  the  change  from  the  legal 
tender  gold  and  silver  coins,  and  their  representatives, 
bank-notes,  to  the  paper  credits  of  the  people,  until  those 
credits  conduct  97  per  cent  and  more  of  the  volume  of 
business;  and  the  periodic  demand  that  the  solvent,  as 
well  as  insolvent,  obligations  of  the  people  be  paid  in 
the  legal-tender  coins,  or  bank-notes,  with  its  resultant 
panics  has  not  been  without  its  impress  upon  the  thought 
of  the  centuries,  though  it  has  met  with  scant  recognition 
in  the  principles  of  government. 

The  incessant  and  irresistible  tendency  of  the  people 
to  solve  all  situations  and  conditions  that  confront  them 
in  the  conduct  of  their  business,  has  caused  them  to  ignore 
the  erroneous  theories  of  the  government ;  and  though  the 
general  prosperity  has  been  advanced,  the  legal  applica- 
tion of  the  erroneous  principles  to  their  practices,  at  re- 
curring periods,  has  taken  from  the  many  to  give  to  the 
few,  until  we  have  the  foulest  of  civilizations. 


CHAPTER   IV. 


NTELLIGENCE  has  been  endeavoring  for  a  cen- 
tury to  analyze  this  change  from  the  use  of 
concrete  intrinsic-value  objects,  as  standards  of 
value,  and,  therefore,  standards  of  payment,  to  the  use 
of  paper  representatives  of  the  "words  of  the  Money  of 
Account"  which,  though  they  have  no  intrinsic-value,  are 
used  in  practice,  if  not  in  law,  as  the  standards  of  pay- 
ment. 

The  idea  that  value  was  a  concretion,  and  might  only 
be  implied  in  the  physical  properties  of  gold  and  silver, 
has  always  obtained.  The  idea  that  value  might  be  the 
number  of  units  of  labor  involved,  and  when  a  man  priced 
the  result  of  his  labor  that  he  subconsciously  stated  his 
estimate  of  the  number  of  labor  units  he  had  expended, 
has  never  been  realized,  or,  if  realized,  has  never  been 
acknowledged. 

The  idea  that  value  was,  or  could  be,  anything  other 
than  gold  and  silver,  and  that  the  value  of  other  things 
could  be  anything  other  than  the  amount  of  gold  and 
silver  they  would  exchange  for,  has  never  been  admitted, 
and  seems  to  be  incomprehensible  to  financial  intelli- 
gence. 

The  idea  that  value  is  a  concept,  and  that  "words,"  used 
to  expreiss  those  concepts,  convey  only  ideas  of  man's 
judgment  as  to  the  number  of  units  of  labor  involved; 
and  when  things  are  exchanged,  they  are,  and  can  be, 
justly  exchanged  only  by  a  comparison  of  and  agreement 
as  to  the  number  of  labor  units  expended  on  each,  is 
metaphysically,  economically,  and  scientifically  true. 

When  products  are  offered  in  exchange  it  is  necessary 
to  determine  and  agree  as  to  the  number  of  labor  units  in 


THE  EYOLUTIOy  OF  MONEY.  41 

each,  before  the  relation  between  the  products  can  be 
ascertained — and  this  relation  is  determined  so  soon  as 
there  is  mutual  agreement  as  to  the  price  of  the  products. 

If  the  units  of  labor  in  one  are  5  and  in  the  other  10, 
it  is  expressed  by  the  statement  that  one  is  worth  five 
dollars  and  the  other  is  worth  ten  dollars.  The  relation 
of  the  products  to  each  other,  therefore,  is  the  relation  of 
five  dollars  to  ten  dollars,  or  the  relation  of  five  units  of 
labor  to  ten  units  of  labor. 

Value,  therefore,  may  be  defined  as  the  relation  of 
products  to  each  other,  considering  only  the  agreed  units 
of  labor  expended  in  creating  the  products;  and  the 
"words"  used  to  express  these  relations  are  words  of 
value ;  or  words  of  finance. 

When  paper  representatives  of  these  ''words''  are 
given  the  power  of  governmental  tender  to  compel  their 
acceptance,  as  true  representatives  of  labor  units,  they 
are  on  equality  of  value  with  the  obligations  of  the  peo- 
ple, which  are  issued  as  the  agreed  representatives  of  the 
number  of  labor-units  expended  in  creating  the  products. 

The  conduct  of  business  is  carried  on  by  the  obligations 
issued  in  making  the  exchanges ;  the  use  of  these  obliga- 
tions is  made  serviceable  and  efficient  by  the  arrangement 
that  when  any  of  them  become  suspected  of  being  worth- 
less, and  lose  their  "use-value,"  official  substitutes  must  be 
used  in  their  stead ;  and  in  order  that  the  substitutes  may 
efficiently  serve  the  use,  they  are  given  the  quality  of 
tender.  This  makes  them  serve  as  full  solvents  of  debt, 
but  the  bank-notes — though  they  are  representatives  of 
gold  and  silver — are  not  given  the  quality  of  tender;  and 
if  they  are  accepted,  as  solvents  of  debt,  it  is  because  of 
the  belief  that  those  who  issued  them  will  rede.em  them 
with  legal  tenders,  /.  c,  gold  and  silver  coins. 

If,  in  the  last  analysis,  the  paper  credits  of  the  people 
are  only  valuable  in  their  use  to  the  extent  they  will  com- 
mand bank-notes,  and  the  bank-notes  are  only  valuable  in 
their  use  so  long  as  they  will  be  redeemed  with  legal  ten- 


42  THE  EVOLUTION  OF  MONEY. 

ders,  then  the  "■use-value"  of  the  tivo — however  many  may 
be  actively  engaged  in  conducting  business — can,  by  a 
general  demand  for  the  payment  of  both  in  legal-tenders, 
be  made  ecjual  to  only  the  "use-value/'  of  the  fetv  coins  in 
circulation. 

A  general  demand  for  the  payment  of  the  paper  credits 
that  conduct  97  per  cent  of  the  volume  of  business,  in 
the  legal  tender  coins  and  bank-notes  that  conduct  only 
3  per  cent,  causes  a  panic  whenever  made;  for  it  reduces 
the  value  of  the  use,  or  the  "use-value"  of  the  many  credits 
to  an  equality  with  the  value  of  the  use,  or  the  "use-value" 
of  the  comparatively  few  coins  and  bank-notes. 

The  value  of  the  increased  demand  for  the  few  legal 
tender  coins,  and  their  representatives — bank-notes — to 
I)erform  the  additional  service  that  the  credits  of  the  peo- 
ple perform,  and  conduct  the  entire  volume  of  business, 
is  ignorantly  and  fatuously  assumed  to  be  intrinsic-value. 
Therefore,  under  such  conditions,  the  law  of  tender 
changes  value,  in  the  practices  of  the  people,  from  the 
labor,  or  "use  value,''  of  the  many  paper  representa- 
tives of  "words,"  issued  in  the  conduct  of  their  business, 
to  the  worth  or  value  of  the  use  of  the  few  coins,  and 
bank-notes,  that  cannot  be  made  to  conduct  the  volume  of 
business. 

The  impossibility  of  the  few  coins  and  bank-notes  per- 
forming the  service,  and  the  necessity  that  the  service 
should  be  performed,  exaggerates  their  value,  until  it  is 
an  injustice  to  compel  the  payment  of  the  obligations  of 
the  people  in  coins  and  bank-notes,  or  their  equivalent. 

In  the  practices  of  the  people,  value,  therefore,  is  an 
abstraction,  for  their  obligations  are  mere  paper  repre- 
sentatives of  "words"  that  indicate  the  number  of  labor- 
units  involved. 

In  law  value  is  a  concretion,  /.  e..  gold  and  silver  coins ; 
and  any  effort  to  define  an  abstraction  and  a  concretion, 
as  one  and  the  same  thing,  is  absurd. 

All  exchanges  are  contracts — in  fact,  man,  as  a  civil- 


THE  EVOLUTIOy  OF  MONEY.  43 

ized  being,  has  his  existence  by  means  of  contractual  rela- 
tions. When  contracts  are  properly  understood,  it  may  be 
seen  that  all  the  governmental,  if  not  economic,  evils 
from  which  humanity  suffers  arise  from  the  criminal  ap- 
plication of  intrinsic-value  law  to  ''use-value"  practices. 

When  two  persons  want  to  effect  an  exchange  of  their 
surplus  products  they  cannot  arrive  at  an  understanding 
until  both  agree  as  to  the 'value  of  the  product  of  each; 
and  when  they  have  agreed  as  to  that,  they  have  agreed 
as  to  the  relation  the  products  bear  to  each  other,  and  the 
exchange  is  comi)leted  in  accordance  with  that  relation. 

If  it  is  mutually  agreed  that  the  product  of  one  is 
worth  five  hundred  dollars,  and  the  product  of  the  other 
is  worth  one  thousand  dollars,  and  they  make  the  ex- 
change at  these  valuations,  it  is  a  subconscious  under- 
standing that  the  products  bear  the  relation  to  each  other 
that  500  units  of  labor  bear  to  1,000  units  of  labor. 
Since  the  exchange  would  not  be  equitable,  the  one  who 
has  only  expended  500  units  of  labor  must  give  the  other 
his  product,  and  that  which  will  command  500  units  of 
labor.  This  may  be  done  either  by  giving  him  500  dollars 
in  coin,  or  in  bank-notes ;  and  when  they  are  given  and  re- 
ceived it  is  with  the  subconscious  understanding  on  the 
part  of  both  that  the  500  dollars  of  coins,  or  the  500  dol- 
lars of  bank-notes,  will  command  500  units  of  labor,  or 
its  equivalent,  whenever  it  is  needed. 

This  may  also  be  done  either  by  giving  his  note  for  500 
dollars,  or  the  note  of  some  one  else  for  that  amount  prop- 
erly transferred ;  and  when  the  note  is  given  and  re- 
ceived, it  is  with  the  subconscious  understanding  on  the 
part  of  both  that  the  note  will,  in  the  value  of  its  use 
or  in  its  ''use-value,"  serve  as  500  units  of  labor  until 
it  is  due,  when  it  will  command  500  dollars. 

The  contract  is  that  the  one  is  to  furnish  tlie  oilier  with 
500  units  of  labor,  when  he  agrees  to  pay  him  500  dollars; 
and  this  contract  is  equitably  performed  by  the  use  of  the 
note  to  liquidate  debt,  which  use  it  generally  serves  unless 


44  THE  EVOLUTION  OF  MONEY. 

there  is  an  unnecessary  partial,  or  general,  demand  for  the 
payment  of  the  obligations  of  the  people  in  legal  tender 
coins  and  bank-notes. 

The  demand  that  paper  representatives  of  units  of 
labor,  which,  when  issued  are  intended  to  be  liquidated 
with  other  and  equal  paper  representatives  of  units  of 
labor,  shall,  by  a  partial  or  geueral  demand,  be  made 
payable  in  coin,  or  bank-notes — when  there  are  not 
enough  to  serve  the  enlarged  use — makes  the  demand  for 
the  coins  and  bank-notes  so  large  and  so  intense  that  it 
unduly  enhances — not  the  value  of  the  properties  of  the 
metal  in  the  coins — but  the  value  of  the  use  of  the  coins. 

When  settlement  is  forced  by  the  law  in  legal  tender 
coins  and  bank-notes,  or  their  equivalent  in  value,  it  takes 
property  to  the  extent  of  a  thousand,  and  more,  units 
of  labor  to  liquidate  the  500  units  of  labor;  and  in  the 
endeavor  to  make  the  exchange,  the  one  who  executed  the 
note  has  lost,  and  the  other  who  received  the  note  has 
gained  what  the  one  lost. 

Three  wrongs  are  committed  against  the  people  in  the 
enforcement  of  all  such  contracts. 

Their  government  gives  to  the  class  that  owns  the  gold 
and  silver : 

1.  A  monopoly  of  the  right  to  all  the  benefits  that 
necessarily,  and  which  can  be  made  to,  accrue  from  the 
exercise  of  its  Sovereign  Tender  power. 

2.  It  gives  to  that  class — at  any  time  its  members 
see  proper  to  exercise  it — the  additional  right  to  demand 
the  payment  of  all  obligations — good  or  worthless — in 
gold  and  silver  coin,  or  their  bank-note  representatives, 
though  it  is  well  known  that  it  is  an  impossibility; 
for  the  many  obligations  issued  to  conduct  97  per  cent  of 
the  volume  of  business  cannot — and  were  never  intended 
to — be  paid  with  the  few  coins  and  bank-notes  that  are 
only  needed,  and  issued  in  sufficient  numbers,  to  conduct 
3  per  cent  of  the  volume. 

3.  It  gives  to  that  same  class  the  use  of  the  power 


TEE  EVOLUTION  OF  J/O-TET.  45 

of  its  courts  to  compel  the  people  to  do  the  impossible; 
or  to  suffer  the  loss  that  is  inevitable,  when  their  prop- 
erty is  sold  to  satisfy  their  labor-value  obligations  in 
legal-tender  coins,  or  their  equivalent — after  the  legal- 
tender  coins  have  been  enhanced  in  service-value,  as  they 
are,  by  the  unnecessary,  enlarged,  and  criminal  demand 
for  them. 

In  theory  these  conclusions  have  been  fully  set  forth  by 
the  best  financial  and  economic  thought  of  the  centuries, 
but  the  fetish-worship  of  the  purest  intellects  for  the 
precious  metals  would  not  permit  them  to  realize  that 
the  service  of  anything  could  be  value,  and  used  as  the 
standard  for  the  measurement  of  other  things,  except 
the  service  of  gold  and  silver  coin. 

In  the  latter  part  of  the  seventeenth  century  Sir  James 
Stewart  claimed  that  the  "words,"  which  are  known  as 
the  language  of  finance,  might  more  properly  be  termed 
the  "Money  of  Account."     He  writes : 

''Money  which  I  call  'Monej'  of  Account'  is  no  more 
than  a  scale  of  equal  parts,  invented  for  measuring  the 
respective  value  of  things  vendible.  'Money  of  Account' 
is,  therefore,  quite  a  different  thing  from  money  coin, 
and  might  exist  although  there  were  no  such  thing  in  the 
world  as  any  substance  which  could  become  an  adequate 
and  proportional  equivalent  for  every  commodity. 

"  'Mone}^  of  Account'  performs  the  same  office,  with 
regard  to  the  value  of  things,  that  degrees,  minutes,  sec- 
onds, etc.,  do  with  regard  to  angles,  or  as  scales  do  to 
geographical  maps,  to  plans  of  any  kind — in  all  these 
inventions  there  is  some  denominative  taken  for  the  unit. 

''In  angles,  it  is  the  degree;  in  geography,  it  is  the  mile; 
in  plans,  foot,  yard;  in  money,  it  is  the  pound,  livre, 
florin,  etc.  The  degree  has  no  determinate  length,  so 
neither  has  that  jtart  of  the  scale  upon  the  plans  or  maps 
which  mark  the  Unit;  the  usefulness  of  all  these  things 
being  solely  confined  to  the  marking  of  proportions.  Just 
so,  the  Unit  in  money  can  have  no  invariable  determinate 


46  THE  EVOLL'TIoy  OF  MOyEY. 

proportion  to  any  part  of  value;  that  is  to  sav,  it  cannot 
be  fixed  in  jierpctiiitij  to  any  ixtrticiilar  quantity  of  gold 
or  silver,  or  any  other  com  mod  it  y. 

"^The  value  of  commodities  depending  upon  circum- 
stances relative  to  themselves,  their  value  ought  to  be 
considered  as  changiug  with  respect  to  one  another  only ; 
consequently,  anything  which  troubles  or  perplexes  the 
ascertaining  these  changes  of  proportion  by  the  means 
of  the  general  determining  and  invariable  scale,  must  be 
hurtful  to  trade;  and  this  is  the  infallible  consequence 
of  every  vice  in  the  policy  of  money  or  coin. 

"Money — by  which  we  intend  coins  of  gold  or  silver — is 
neither  a  standard  of  value,  a  measure  of  value,  nor  a 
representative  of  value. 

"The  precious  metals  are  commodities  of  value,  and 
do  not,  of  course,  lose  that  quality,  though  they  gain 
another, 

''At  the  present  time  the  precious  metals  are  employed 
only  as  standards  of  payment,  or  legal-tender;  as  the 
medium  of  the  merest  retail  trade;  as  a  reserve  or  se- 
curity for  their  issue  by  banks  of  circulation ;  and  as  the 
medium  of  paying  balances  of  trade  both  foreign  and 
domestic — all  these  together  do  not  make  5  per  cent  of 
the  operations  of  industry  and  trade  in  Great  Britain. 
All  the  rest  is  accomplished  by  means  of  credit,  and  the 
many  processes  of  the  'credit  system.' 

''It  must  be  a  great  and  mischievous  fallacy,  then,  to 
regard  gold  and  silver  coins  as  a  sort  of  model  medium  of 
exchange,  to  the  characteristics  and  incidents  of  which 
all  other  modes  of  interchange  must  be  made  to  corre- 
spond. This  is  nothing  less  than  an  attempt  to  fasten 
upon  industry  and  commerce  the  very  shackles  and  in- 
com-eniences  which  they  have  long  been  struggling  to 
cast  away. 

"There  are  many  ways  of  making  payments  without 
using  coins,  each  of  which  may  stand  for  what  it  is  worth, 
and  be  employed  according  as  it  may  be  available,  with- 


THE  EVOLT'TIOy  OF  MO'SEY.  47 

out  beiug  tortured  to  work  as  coins  would  have  been 
worked  if  they  had  been  employed. 

"Where  two  nieu  of  business  deal  largely  together,  keep- 
ing the  record  in  their  books  of  account,  which  once  in 
three  months  are  balanced,  and  the  mutual  debts  thus 
paid  without  the  use  of  coins,  there  is  no  possible  sense 
in  which  the  mutual  payments  thus  etfected  could  be 
made  more  eflectual  by  any  reference  to  coins  than  by 
this  simple  and  economical  method  of  balancing  the  sums 
of  the  various  entries,  debts  and  credits,  expressed  in 
'Monej^  of  Account,'  the  one  against  the  other. 

"This  mode  of  payment  needs  no  aid  in  theory,  in  prac- 
tice, or  by  analogy,  from  any  em])loyment  of  coins;  but 
this  mode  of  payment  is  one  of  the  main  devices  of  the 
'credit  system.'  As  the  debts  of  men  of  business  find 
their  way  into  the  banks,  so  do  their  credits;  and  the 
function  of  the  banks,  stripped  of  their  many  complica- 
tions, consist  chiefly  in  balancing  and  thus  extinguishing 
the  debts  and  credits  of  their  customers.  There  is  no 
ground,  we  think,  for  the  doctrine  that  the  incidents  and 
characteristics  which  attend  a  currency  of  gold  and  silver 
should  be  imitated,  or  even  referred  to,  in  the  process  of 
the  'credit  system,'  much  less  regarded  as  law." 

From  the  above,  it  is  evident  that  Sir  James  regarded 
the  "words"  that  constituted  what  lie  called  "Money  of 
Account,"  as  a  sjtecies  of  scales  for  the  measurement  of 
things  vendible,  entirely  separate  and  distinct  from  coins 
of  gold  and  silver,  and  to  be  exclusively  used  in  the  busi- 
ness that  was  conducted  by  the  "credit  system." 

He  advanced  the  idea  that  the  quantity  of  gold  or  silver 
necessary  to  l)e  ])ut  into  the  coins,  to  make  them  the  value 
of  the  "words"  that  named  the  coins,  had  to  be  measured 
and  determined  by  the  idea  of  value  those  "words"  con- 
veyed. 

Therefore,  if  the  "words"  of  the  "Money  of  Account" 
were  originated,  or  were  used,  to  convey  ideas  of  labor 
units,  then  those  ideas  determined  how  much  gold  and 


48  THE  EVOLVTIOy  OF  }IONEY. 

silver  should  be  put  into  the  coins  to  make  them  equal 
to,  or  the  equivalent  of,  the  number  of  labor  units  implied 
by  the  words  that  named  the  coins. 

If  this  be  true,  is  not  the  use  of  those  things,  which 
serve  as  representatives  of  the  ''words"  of  value,  in  the 
last  analysis,  value,  whether  they  are  coin,  or  paper  rep- 
resentatives of  the  "words  of  the  Money  of  Account?" 

Since  neither  the  coins,  nor  paper  representatives,  will 
be  accepted  in  full  satisfaction  of  debt  until  they  are 
given  the  power  of  tender,  is  not  the  power  of  government, 
that  compels  their  acceptance  and  ensures  their  service, 
value  ? 

"]\Ioney  of  Account"  may  therefore  be  stated  to  be 
that  growth  in  the  practical  intelligence  of  a  people  which 
finally  characterizes  their  ideas  of  the  relation  of  products 
to  each  other — considering  onl}-  the  labor  units  expended 
— by  "v/ords"  used  to  express  the  number  of  labor-units 
involved,  and  which  are  known  as  the  wordtS  of  value  or 
the  language  of  finance. 

These  observations,  setting  forth  in  theory  the  evolu- 
tion of  value  from  gold  and  silver  coins  to  the  serviceable 
use  of  things  which  rei)reseut  "Avords"  that  accurately  and 
unchangeably  express  ideas  of  labor-units,  have  not  been 
taken  advantage  of  by  governments  in  providing  money 
for  the  use  of  the  people. 

This  may  have  been  due  to  the  fact  that  Sir  James  con- 
sidered only  that  portion  of  the  volume  of  business  which 
is  conducted  by  the  "credit-system,"  wherein  the  obliga- 
tions of  the  people  are  so  used  that  they  operate  to  liqui- 
date each  other,  unless  a  balance  is  left. 

The  settlement  of  these  balances,  and  the  trades  of 
the  cash  system  may  not  be  made  by  the  labor  obli- 
gations; and  for  obvious  reasons  the  government  is  re- 
quired to  issue  official  equivalents  to  serve  the  needs  of 
the  people  in  their  trading  relations. 

In  the  consideration  of  how,  and  out  of  what,  the  offi- 
cial  substitutes   should  be  made,   gold  and   silver  were 


THE  EVOLrTION  OF  MOXEY.  49 

assumed  to  be  the  substances  best  fitted  for  the  purpose; 
and  Sir  James  endeavored  to  devise  a  practical  working 
plan  for  ''use-value"  money  to  conduct  the  "credit  sys- 
tem/' and  intrinsic-value  coins  to  conduct  the  cash  sys- 
tem, and  settle  balances  in  the  credit  system,  without 
realizing  the  absurdity  of  the  attempt. 

The  error  of  making  the  many  obligations  which,  at 
that  time,  conducted  05  per  cent  of  the  volume  of  busi- 
ness, depend,  for  their  *'use-value,"'  upon  the  gold  and  silver 
coins  Avhich  only  conducted  5  per  cent  of  the  volume,  and 
which  depended  upon  the  power  of  legal-tender  for  the 
value  of  their  use,  or  their  service-value,  would  have  been 
corrected  long  since,  but  for  the  teachings  of  Adam  Smith, 
who  wrote  shortly  thereafter. 

In  his  work,  entitled  an  ''Inquiry  Into  the  Nature  and 
Cause  of  the  Wealth  of  Nations,"  he  attracted  the  atten- 
tion of  the  world  by  his  demonstration  that  the  source  of 
value  was  labor. 

Though  he  came  to  the  conclusion,  and  his  reasoning 
forces  all  intelligence  to  the  conclusion,  that  labor  is  the 
source  of  value,  he  did  not  have  the  dimmest  comprehen- 
sion that  the  language  of  values,  /.  c,  the  "words"  of  the 
Money  of  Account,  conveyed  only  ideas  of  labor-units — 
nor  that  the  "word,"  known  as  the  Unit  of  the  Money  of 
Account,  is  the  Unit  of  Labor.  He  did  not  realize  that  the 
obligations  of  the  ])eople  were  mere  individual  representa- 
tives of  "words"  that  expressed  lal)or  units,  and  that  the 
legal-tenders — whether  metal  or  paper — were  only  issued 
to  1k'  used  as  sul)sti lutes  of  the  obligations  of  the  people 
when  they  had  lost  the  value  of  their  use,  /.  e..  their  service, 
or  labor  value. 

He  assumed  that  the  "word,"  known  as  the  T'nit,  was 
the  T'nit  of  Value,  and  since  he  was  not  able  to  disasso- 
ciate the  idea  of  value  from  gold  and  silver,  he  decided 
that  they  were  value,  notwithstanding  his  demonstration 
that  labor  was  the  source  of  value. 

The  pureness  of  his  faculties  appreciated  the  error,  and 
4 


50  THE  EVOLUTION'  OF  2I0NEY. 

he  endeavoied  to  foimulate,  or  oi-igiuate,  a  Unit  of  Labor 
in  his  desire  to  remove  the  logical  discrepancy. 

When  his  ingenuity  conld  not  devise  a  practical  work- 
ing substitute  for  the  Unit  of  Labor  originated  by  the 
people,  but  which  his  commercial  materialism  would  not 
permit  him  to  see,  though  he  held  it  in  the  focus  of  his 
intellectual  eye,  he  abandoned  the  effort. 

His  intelligence  having  been  compelled  to  accept  a  cer- 
tain quantit}'  of  gold  or  silver  as  the  measure  of  the 
value  of  the  Unit,  it  was  further  compelled  to  adjust  its 
reasoning  to  the  acceptance  of  that  I'nit,  and  in  his  desire 
to  preserve  the  truth  of  his  deduction,  that  labor  is  the 
source  of  value,  he  drew  a  distinction  between  the  value 
of  the  product — which  he  contended  was  determined  by 
the  labor  expended  on  it — and  the  price,  or  legal  tender 
gold  and  silver,  that  the  product  would  command. 

He  drops  into  a  footnote  in  explanation  of  the  error, 
and  wrote  that  when  he  or  any  one  writes  or  thinks  about 
money,  it  is  easier  and  better  to  think  of  it  as  having  no 
intrinsic  value. 

Still  contending  that  the  value  of  products  was  deter- 
mined by  labor,  but  their  price  was  the  quantity  of  gold 
or  silver  they  would  exchange  for,  he  continued  his  pro- 
found inquiries  into  the  Nature  and  Causes  of  the  Wealth 
of  Nations  in  a  work  which  has  been  an  authority  for  the 
right  of  the  few  to  apply  intrinsic-value  law  to  the  "use- 
value"  practices  of  the  many,  notwithstanding  it  produces 
panics  until  it  causes  revolutions. 

The  intellectual,  moral,  religious,  and  physical  bondage 
of  the  many  to  the  few — brought  about  by  the  recurrence 
of  the  application  from  the  second  to  the  fifteenth  cen- 
tury— became  more  servile  and  inhuman  as  the  amount  of 
gold  and  silver  decreased  from  $1,800,000,000  in  the  time 
of  Caesar,  to  $200,000,000  at  the  discovery  of  America. 

With  the  exception  of  the  Eepublic  of  Venice,  and  its 
bank,  the  civilization  of  the  world  found  only  such  relief 
as  was  secured  from  the  mediaeval  bank-credits,  until  the 


THE  EVOLLTIOy  OF  2I0JS'ET.  51 

iucreased  supply  of  gold  aud  silver  from  America  grad- 
ualh'  produced  an  intellectual,  moral,  religious,  aud  phys- 
ical freedom  that  cast  off  the  serfdom  of  the  Dark  Ages. 

The  abundance  of  gold  and  silver — the  more  facile  use 
of  the  bank-credits;  and  then  the  enlarged  use  of  bank- 
notes, and  of  the  many  devices  of  the  people  that  custom 
made  legal,  produced  enlarged  prosperity;  but  the  civili- 
zation of  that  prosperity  is  unwholesome,  for  it  is  the  civ- 
ilization of  intrinsic-value  law,  and  "use-value''  practices. 

The  bestowal  upon  class  of  the  exclusive  right  to  apply 
intrinsic-value  law  to  "use-value"  practices,  has  always 
operated  to  enlarge  the  prosperity  and  power  of  the  few 
at  the  expense  of  the  many,  until — as  a  result  of  the  exer- 
cise of  the  barbarian  right — there  is  produced  an  unnat- 
ural degeneracy  in  both  class  and  the  i^eople. 

A  degeneracy  that  may  be  seen  in  the  social  immorality, 
venal  intellectuality,  financial,  commercial,  religious, 
and  political  degradation  of  class,  its  sycophants  and 
tools:  and  the  degradation  of  the  vicious  and  unnatural 
immorality  that  has  always  characterized  mankind,  as  it 
is  deprived  of  the  right  and  opportunity  to  live  by  the 
sweat  of  the  face,  and  pressed  backwards  to  the  dead- 
line of  existence. 


CHAPTER  V 


HE  I'uited  States  was  intended  to  be  an  asylum 
from  the  injustice,  inequities,  and  iniquities  of 
governments  that  gave  chiss  the  right  to  exploit 
the  people,  and  enforced  the  right  whenever  and  as  often 
as  it  was  asked  or  demanded. 

A  close  reading  of  the  history  of  the  Colonies  will  show 
that  the  prosperity  of  the  i>eople  was  due  to  their  enjoy- 
ment of  "use-value,"  and  when  the  Mother  Country,  in 
the  interest  of  class,  not  only  applied  intrinsic-value  law 
to  their  ''use-value''  practices,  but  denied  them  the  longer 
enjoyment  of  ''use-value,''  their  prosperity  was  crushed, 
and  from  a  ha])py  they  suddenly  became  a  distressed  and 
suffering  people. 

It  was  realized  that  the  operation  of  laws — in  the 
making  of  which  they  had  no  part — was  gradually,  but 
surely,  transferring  their  values  to  the  Mother  Country. 
They  felt  in  their  hopes  and  in  their  ambitions  that  the 
future  held  nothing  for  them  but  travail  of  spirit,  an- 
guish of  mind,  and  suffering  of  body;  but  they  had  no 
intelligent  conception  of  the  cause  of  the  change,  as  is 
indicated  by  the  war  cry  of  the  Eevolution :  '"Taxation 
without  representation  is  tyranny." 

The  Ignited  States  was  the  result  of  the  revolt  against 
the  application  of  intrinsic-value  law  to  use,  or  labor- 
value  practices. 

An  inferior  number  of  collective  people — acting  as  a 
unit — had  exercised  their  power  in  such  a  sacrificial,  loyal, 
and  determined  spirit  that  they  had  defeated  the  most 
powerful  government  in  Europe,  and  wrested  from  her 
insatiate  demands  their  right  to  separate  autonomy  and 
'"use-value"  practices. 


THE  EYOLUTIOy  OF  ilOXEY.  53 

Could  they,  as  a  collective  people,  continue  the  benign 
and  equitable  exercise  of  that  power  towards  each  other, 
after  the  necessity  for  the  sacrificial  and  cohesive  exercise 
of  power  against  a  common  enemy  had  been  removed? 

That  desideratum  is  the  test  of  government. 

The  formation  of  government  by  such  a  people  was 
watched  with  intense  interest  to  see  if  the  good  results  of 
the  Kevolution  could  be  permanently  secured.  Govern- 
ment is  a  necessity  for  all  collective  people.  The  avarice, 
lust,  and  ambition  of  a  people  has  no  sense  or  appreciation 
of  equity;  and  might  cause  injustice  to  rule  until  it  is 
curbed,  and  made  to  respect  right. 

fjquity  is,  therefore,  artificial  in  its  efll'ect,  but  its  spirit 
is  the  cause  of  liberty  in  government;  for  government  is 
only  the  manifestation  of  the  intelligence  exhibited  in  the 
equity  and  legality  of  the  practices  which  secure  the  en- 
joyment of  the  fruits  of  labor. 

All  collective  people  must  also  act  as  a  unit,  in  order 
that  they  may  protect  themselves  from  the  aggressions 
of  each  other,  and  from  the  aggressions  of  other  collective 
people,  acting  as  a  goA'ernment.  The  people  of  one  nation 
have  no  more  right  to  live  off  the  labor  of  other  people, 
than  one  man  has  the  right  to  live  off  the  labor  of  another ; 
and  Avhenever  attempted  it  should  be  cause  of  war  between 
nations,  and  cause  of  revolution,  if  allowed  by  a  govern- 
ment among  its  people. 

After  the  Revolution,  the  colonies,  as  i^tates,  were  a 
collection  of  separate  and  independent  units  that  had  no 
inducement  to  act  as  a  general  unit,  except  for  better  and 
safer  protection  against  the  aggressions  of  foreign  gov- 
ernments. As  seiiarate  and  indei)endent  States  they  could 
not  hope  for,  nor  did  they  desire,  any  greater  ]tros]writy 
than  they  had  enjoyed  from  their  equitable  conduct 
towards  each  other,  under  their  "use-value"  ]tra<ti(es, 
until  they  were  deiniyed  of  them  by  the  laws  of  ICngland 
in  the  interest  of  class.  They  knew  that  the  denial  of  the 
right  to  ''use-value''  practices  had  pi-oduced  their  distress, 


54  THE  EVOLUTION  OF  MONEY. 

and  precautions  were  taken  in  the  i^tate  governments  to 
provide  against  similar  evils. 

The  government  of  the  States,  as  separate  and  inde- 
pendent units,  was  perfect,  and  expressed  in  the  ruling 
thought  of  that  day  "equality  of  right  and  opportunity 
for  all,  and  special  privileges  to  none." 

There  was  no  purpose  in  the  thoughts  of  the  people, 
there  could  have  been  no  intelligent,  honest,  and  patriotic 
intention  on  the  part  of  the  leaders,  to  change  the  satis- 
factory State  governments  further  than  might  be  neces- 
sary to  provide  a  general  government  which  would  pre- 
serve the  autonomy  of  the  States,  and  protect  the  people 
of  each  State  from  the  aggressions  of  the  people  of  the 
other  States. 

The  problem  to  be  solved  was :  Could  a  government  be 
formed  which  would  at  the  same  time  preserve  the  sepa- 
rate and  independent  sovereignty  of  the  States,  as  units, 
and  the  over-lord  sovereignty  of  the  collective  States,  as 
a  unit,  in  all  cases  where  it  was  essential? 

The  agreement  for  such  a  dual  form  of  government  was 
embodied  in  the  instrument  knowai  as  the  Constitution  of 
the  United  States. 

This  part  of  the  government  was  most  peculiar  in  that 
it  had  no  inherent,  or  original  sovereignty — as  had  the 
States,  and  all  nations.  Such  sovereign  powers  as  it  had, 
were  those  given  it  by  the  compact  of  the  States,  and 
were  to  be  used  only  for  the  purposes  had  in  mind  when 
they  agreed  to  the  compact.  This  is  shown  from  the  in- 
ternal evidence  of  the  Constitution,  in  the  clause  where 
the  "powers  not  delegated  by  the  States  to  Congress  are 
expressly  reserved.'' 

An  examination  of  the  Constitution  discloses  that  the 
powers  delegated  were  confined  to  conservation  of  two 
ideas ;  the  first,  and  most  important,  at  that  time,  was  the 
essential  one  of  dealing  with  foreign  nations,  and  the 
adjustment  of  occurrences  outside  the  boundaries  of  the 
States  which  affected  the  interest  of  any  of  the  citizens  of 
the  States. 


THE  ETOLUTIoy  OF  MONEY.  55 

The  second — aud  most  important  at  this  time — was  the 
essential  one  of  confining  the  exercises  of  the  powers  of 
a  State  to  its  jurisdiction  ;  and  the  delegation  of  all  power 
to  the  general  government  necessary  to  prevent  one  State 
from  inissing  laws  favoring  its  people  at  the  expense  of 
the  people  of  other  States. 

The  distribution  of  the  exercise  of  the  sovereign  powers 
of  the  States  between  themselves,  and  the  United  States, 
was  perfect  and  scientific,  and  would  have  worked  har- 
moniously if  the  intelligence  of  the  country  had 
known  what  Avere  sovereign  powers.  The  dominant 
idea  in  forming  the  dual  government,  and  in  distribut- 
ing the  exercise  of  sovereign  powers,  was  tliat  it 
must  be  so  done — whether  the  iiowers  Avere  exercised  by 
the  States  or  by  Congress — that  '"equality  of  right 
and  opportunity  for  all  and  special  privileges  for  none," 
would  be  secured. 

If  the  distribution  and  exercise  of  the  sovereign  powers 
of  the  States  has  been  such  that  "equality  of  right  and 
opportunity"  has  been  secured,  then  there  are  no  evils  of 
government^ — for  that  is  the  only  source  of  governmental 
evils.  If  there  are  evils  in  the  body  politic,  there  is  no 
remedy  to  be  found  v^•hen  equality  of  right  and  opportu- 
nity is  being  secured ;  and  civilization  must  in  the  future, 
as  in  the  past,  be  a  mere  experiment  for  the  amelioration 
of  unwholesome  conditions. 

Conditions,  Avhich  the  wealthy  few  and  their  dependent 
/satellites  say  are  being  changed  for  the  better;  while  the 
poor,  the  Independents,  the  Socialists,  many  of  the  Demo- 
crats, and  a  few  of  the  Eepublicans,  claim  they  are  grow- 
ing worse. 

If  the  distribution  and  exercise  of  the  sovereign  powers 
have  been  such  that  "equality  of  right  and  opportunity" 
liave  not  been  secured,  but,  to  the  contrary,  all  the  benefits 
that  necessarily  and  unavoidably  accrue  from  the  exer- 
cise of  said  powers  are,  in  some  instances,  exclusively 
Ijestowed  upon  a  favored  few,  until  this  country  is  fast 


56  THE  EVOLUTIOX  OF  MOyEY. 

becoming  an  "Empire  of  Misery,"  then  it  ought  to  be 
pointed  out  and  corrected. 

The  dominant  and  dominating  power  in  this  countr}',  if 
not  in  the  world,  is  the  Mone^^  Power. 

The  Kings  of  Finance  exercise  more  power  and  exert 
more  influence  upon  the  administration  of  this  govern- 
ment, and  the  affairs  of  the  people,  than  the  President, 
Congress,  and  the  State  Legislatures.  Though  the 
form  of  the  government  remains  intact,  and  the  rites 
of  administration  are  apparently  observed,  it  is  well 
known  that  the  officials  are,  consciously  (or  un- 
consciously), the  mere  puppets  of  the  Money  Power;  and 
abuse  their  offices  to  put  the  seal  of  legality  upon  all 
crimes  of  favoritism. 

Is  the  exercise  of  the  power  to  issue  money  one  of  the 
.sovereign  powers,  or  is  it  one  of  the  many  powers  that 
belong  to  individuals?  At  the  time  the  Constitution 
was  framed  it  was  supposed  to  be  one  of  the  powers  of 
the  individual ;  but  so  important,  in  its  effect  upon  the 
people,  that  the  issue  and  use  of  money  should  be  super- 
vised and  regulated  by  governments. 

This  observation  brings  the  examination  of  the  subject 
back  to  where  it  was  left  by  Sir  James  Stewart,  and  sub- 
sequently passed  upon  by  Adam  Smith. 

The  change  from  the  issue  of  money  as  a  private  right, 
to  the  issue  of  money  as  a  governmental  function,  was 
made  when  it  was  found  necessary  to  give  gold  and  silver 
the  legal-tender  power  to  compel  their  acceptance,  as 
solvents  of  debt;  but  it  was  not  appreciated  any  more 
by  the  framers  of  the  Constitution  than  by  Sir  James 
Stewart  and  Adam  Smith. 

The  eftect  of  the  governmental  ]>ower  was  felt  in  the 
more  serviceable  use  of  the  legal-tender  money,  but  not 
intelligently  appreciated,  for  the  value  of  the  use  was 
regarded  as  intrinsic-value;  and,  therefore,  the  exercise 
of  the  power  was  considered — not  a  function  of  govern- 
ment— but  a  private  right  that  must,   in   consideration 


THE  EVOLLTIOX  OF  MONEY.  57 

of  its  importance  to  the  people,  be  supervised  aud  regu- 
lated by  Congress — not  bj  the  States. 

There  was  a  subconscious  fear  on  the  part  of  some  mem- 
bers of  the  Convention  that  the  regulated  exercise  of  the 
power  might  violate  the  sacred  principle  of  ''equal  rights 
and  opportunities  for  all,  aud  special  privileges  to  uone/' 
when  it  was  proposed  to  limit  the  use  of  money  to  gold 
aud  silver;  but  the  fetish  worship  of  the  precious  metals, 
and  ignorance  of  the  fact  that  the  issue  of  money  Avas 
the  exercise  of  a  sovereign  power  caused  the  Constitution 
to  be  written  as  it  was.  It  was  contented  that  the  sacred 
principle  had  been  preserved  in  the  claim  that  every  one 
had  the  equal  right  to  carry  his  gold  and  silver  to 
the  mints  to  be  coined  into  money. 

This  contention  is  considered  sound  by  many  today, 
though  it  has  been  demonstrated  that  it  has  always  been 
ji  monopoly  for  the  few — who  have  had  the  exclusive  en- 
joyment of  the  benefits  that  naturally  and  unavoidably 
accrue  from  the  exercise  of  said  i)0wer — until  individual 
wealth,  greater  than  the  aggregate  wealth  of  some  na- 
tions, has  been  developed. 

The  intrinsic-value  system  was  strengthened  by  with- 
holding from  Congress,  and  denying  to  the  States,  the 
exercise  of  the  sovereign  power  "to  emit  bills  of  credit;" 
Avhich,  proi>erly  construed,  means  that  both  Congress 
and  the  States  were — in  the  interest  of  class — deprived 
of  the  right  and  power  to  assist  the  people  in  the  con- 
duct of  their  business  by  the  issue  of  ''use-value"  repre- 
sentatives of  the  "words"  of  tlie  Money  of  Account,  made 
efficient,  as  solvents  of  debt,  by  the  legal-tender  power. 

For  centuries  the  exclusive  use  of  gold  and  silver  had 
not,  by  reason  of  the  scarcity  of  the  metals,  been  ,suilicient 
to  conduct  the  business  of  tlie  peoi)le. 

The  people  owed  their  advance  from  barbarism  to  civili- 
zation to  the  use-value,  /.  c.  service,  of  bank-credits  at 
first,  and  then  to  the  use-value,  /.  c,  service,  of  bank- 
notes ;  and  they,  of  this  country,  owed  their  Indei)endence 


58  THE  EVOLVTIOlSi  OF  MOXEY. 

to  the  use-value,  /.  e.^  service,  of  the  Continental  currency, 
though  it  was  ruthlessly  destroyed  in  favor  of  gold  and 
silver,  or  intrinsic-value;  and  yet  under  the  new  govern- 
ment they  were  to  be  deprived  of  the  right  to  ''use-value," 
and,  in  the  conduct  of  their  business,  compelled  to  rely 
on  a  system  that  had  not  been  efficient  for  centuries. 

This  denial  to  the  people  of  the  right  to  "•use-value" 
was  buttressed  by  withholding  from  Congress  the  power 
to  grant  charters  of  incorporation,  because  of  the  fear 
the  power  would  be  abused  by  the  grant  of  a  charter  to  a 
bank  with  authority  to  issue  notes — it  being  understood 
that  the  denial  to  the  States  of  the  power  ''to  emit  bills  of 
credit"  prevented  them  from  chartering  Banks  of  Issue. 

The  Constitution,  therefore,  gave  the  favored  few  gold 
and  silver  owners  the  right  to  the  exclusive  use  of  the 
barbaric  intrinsic-value  system,  enforced  by  the  legal- 
tender  power  of  the  government;  and  it  withheld  from 
Congress,  and  denied  to  the  States,  all  power  to 
give  the  people  the  right  to  use  paper  representatives 
of  the  "words"  of  value,  impressed  with  the  legal-tender 
power,  or  what  may  be  called  "use-value." 

The  Constitution  was,  in  its  provisions  for,  and  restric- 
tions on,  the  issue  of  money,  a  retrogression  to  the 
methods  of  advanced  barbarians,  however  admirable  it 
may  have  been  in  other  respects ;  and  if  its  provisions  had 
been  strictly  enforced,  the  government  would  have  died 
by  the  hands  of  its  accouchers. 

"Use-value"  is  as  essential  to  the  existence  of  a  govern- 
ment and  its  people  as  is  air. 

The  "words"  that  convey  to  intelligence  ideas  of  value 
are,  in  the  service  rendered  by  their  representatives,  use- 
value,  and  they  are  equally  essential.  Therefore, 
Hamilton  and  Jefferson  changed  the  "words"  of  the 
Money  of  Account  from  the  pounds,  shillings,  and 
pence  of  the  English  language,  to  the  easier-computed 
decimal  words,  dollars,  dimes,  cents,  and  mills. 

Representatives  of  these  "words"  are  being  continually, 


THE  EVOLUTIOy  OF  MONEY.  59 

numei'oii.sly,  aud  variously  issued  by  the  people  in  the 
couduet  of  business,  aud  are  known  as  bills,  accounts, 
notes,  acceptances,  drafts,  orders,  checks,  deeds,  mort- 
gages, trusts,  bills  of  lading,  warehouse  receipts,  bonds, 
stocks,  and  other  devices  employed.  They  are  chiefly  used 
in  the  "credit,  or  bookkeeping  system"'  of  conducting  busi- 
ness, and  liquidate  each  other  at  their  labor  values,  so 
long  as  they  are  entitled  to  aud  have  ••use-value." 

It  is  not  possible,  in  the  "credit-system,"'  for  the  obliga- 
tions of  the  people  to  exactly  liquidate  each  other,  aud 
after  they  have  efficiently  served  their  full  use,  as  liquida- 
tors, and  been  cancelled,  there  are  balances  on  many,  if 
not  all,  of  the  books  that  remain  unsettled.  These 
unsettled  balances,  the  obligations  of  the  people 
which  have  lost  their  ''use-value,"  and  that  portion  of 
the  volume  of  business  which  is  known  as  retail,  and  con- 
ducted by  the  cash  system,  has  to  have  a  medium  of  ex- 
change. 

It  is  just  here  the  government  must  intervene  and  fur- 
nish the  people  with  money,  or  official  substitutes,  that 
should  be  true  substitutes  of  the  labor  value  obligations 
of  the  people,  so  that  the  equities  might  be  preserved  when 
they  are  used  to  settle  balances,  to  pay  those  obligations 
which  have  lost  their  "use-value,"  and  to  conduct  the 
retail  trade,  or  that  business  carried  on  by  the  cash 
system. 

When  money  was  issued  as  a  private  right,  and  before 
the  legal-tender  power  of  the  government  was  necessary 
to  compel  its  acceptance  as  solvents  of  debt,  gold  and  sil- 
ver were  regarded  as  best  fitted  to  perform  the  service,  be- 
cause of  their  inherent  worth,  or  intrinsic-value,  as  has 
heretofore  been  explained.  But  after  gold  and  silver 
had,  by  reason  of  their  cumbrousness,  inefficiency, 
and  proven  unfitness  to  serve  the  needs  of  a  higher  civiliza- 
tion, been  forced  to  surrender  that  use  /.  c,  service, 
to  bank-credits  and  bank-notes,  and,  to  the  extent 
that    they    had    surrendered    the    iierfonnanco    of    the 


60  THE  EVOLUTION  OF  ilOXEY. 

service,  had  lost  their  so-called  iutrinsic-value,  and 
had  to  be  given  the  power  of  tender,  the  issue  of  mone\' 
became  a  function  of  government,  and  the  exercise  of  one 
of  its  sovereign  powers. 

This  had  been  clearly  shown  by  Sir  James  Stewart 
when  he  demonstrated  that  the  ''words"  of  finance  were 
the  "words"  of  the  Money  of  Account — that  "Money,  by 
which  we  intend  coins  of  gold  or  silver,  is  neither  a 
standard  of  value,  a  measure  of  value,  nor  a  representa- 
tive of  value ;"  and  it  is  not  understood  why  he  was  not 
appreciated  when  he  wrote :  '"Money  which  I  call  'Money 
of  Account'  is  no  more  than  a  scale  of  equal  parts,  in- 
vented for  measuring  the  respective  value  of  things  vendi- 
ble." 

If  the  "words  of  value"  are  used  to  express  the  mean- 
ing of  the  many  and  varied  obligations  issued  by  the 
peo])le;  if  these  obligations  need  official  substitutes,  /.  c. 
legal-tenders,  to  take  their  place  when  they  lose  their 
right  to  serve  as  liquidators  of  debt,  it  is  not  understood 
why  gold  and  silver  were  selected  and  given  the  Tender 
quality  to  enable  them  to  serve  the  necessary  use, 
solely  on  account  of  their  claimed  intrinsic-value,  if  intel- 
ligence, and  not  avarice,  was  engaged  in  the  solution  of 
the  problem. 

Though  Adam  Smith  failed  to  assert  that  labor  was 
value;  though  he  failed  to  assert  that  the  "words"  of 
value  were  expressions  of  labor,  or  that  the  unit  of  value 
was  necessarily  and  logically  the  unit  of  labor,  /,  c.  Sir 
James  Stewart's  ''T'nit  of  the  ]\[oney  of  Account,"  he  had 
demonstrated  that  labor  was  the  source  and  origin  of  the 
idea  of  value — and  as  a  necessary  consequence,  that  labor 
was  value.  The  teachings  of  these  two  men,  and  the 
experience  of  the  colonists,  before  and  during  the  Revolu- 
tion, had  not  given  the  intelligence  of  the  country  any 
knowledge  of  "use-value;"  but,  to  the  contrary.  Con- 
tinental, or  "use-value"  money,  unsupported  hi/  the  power 
of  tender,  had  been  left  to  the  mercy  of  intrinsic-value 


THE  EVOLUTIOX  OF  MOXEY.  61 

law  until  it  had  caused  such  loss,  that  the  framers  of  the 
Constitution  endeavored  to  eliminate  the  possibility  of 
*'use-value"  j)i'actices. 

The  government,  however,  was  not  able  to  exist  from 
April  30,  1789,  when  Washington  was  inaugurated,  until 
December,  when  Congress  convened,  without  the  assist- 
ance of  "use-value;''  and  Hamilton — who  had  been  ap- 
pointed ^^ecretary  of  the  Treasury — informed  that  body 
that  there  was  not  enough  gold  and  silver  in  the  country 
to  serve  the  use  required,  and  that  he  had  been  compelled 
to  support  the  government  by  resorting  to  ''use-value," 
when  he  informed  Congress  that  he  had  been  compelled 
to  issue  his  individual  notes  to  support  the  government, 
inasmuch  as  he  had  no  authority  to  issue  them,  as  Secre- 
tary of  the  Treasury. 

Hamilton,  as  Secretary  of  the  Treasury,  felt,  if  he  did 
not  intelligently  appreciate,  the  necessity  for  "use-value," 
and  he  asked  Congress  for  authority  to  adopt  the  "use- 
value"  system,  when  he  asked  it  to  authorize  him  to  issue 
the  necessary  number  of  notes  to  support  the  government. 
The  members  of  the  Constitutional  convention  had 
shown  their  ignorance  of  the  issue  of  money — if  it  is  con- 
sidered a  science — when  they  failed  to  realize  that  it  was 
the  exercise  of  a  sovereign  power;  when  they  failed 
to  realize  that  it  was  the  use,  and  not  the  in- 
herent worth,  of  the  representatives  of  the  ''words" 
of  the  Money  of  Account  that  is  value;  when 
they  failed  to  realize  that  the  "words,"  which  convey  ideas 
of  value,  are  labor  expressions ;  when  they  failed  to  real- 
ize that  the  representatives  of  the  "words"  need 
have  no  intrinsic-value,  since  they  have  to  have  the 
power  of  Tender  to  compel  their  use,  /.  c.  service,  as  sol- 
vents of  debt,  whether  they  are  gold,  silver,  or  i)a])er; 
and  when  they  failed  to  realize  that  they  had  dejirived 
the  government,  and  the  i>eople,  of  all  "use-value," 
when  they  withheld  from  Congress  and  denied  to  the 
States  the  right  "to  emit  bills  of  credit." 


62  THE  EVOLUTION  OF  MONEY. 

The  matter  uoav  comes  before  Congress  upon  the  state- 
ment— admitted — that  the  intrinsic-value  gold  and  silver 
system  has  proven  a  failure,  and  something  will  have  to 
be  done. 

Hamilton,  as  Secretary  of  the  Treasury,  had  the  matter 
in  hand,  and  it  is  proper  to  ascertain  the  extent  of  his 
information  on  the  subject.  In  his  sixth  Continental 
letter  he  had  contended  that  the  government  ought  to  own 
all  the  mines  of  the  precious  metals. 

This  indicates — though  he  did  not  understand  it  is 
power  of  tender  which  makes  the  use  of  gold  and 
silver  certain  and  stable,  and  though  he  did  not  under- 
stand its  exercise  is  one  of  the  sovereign  powers— 
that  lie  nevertheless  felt  the  exercise  of  the  power  was 
the  cause  of  the  certainty  and  stability  in  the  use  of  gold 
and  silver  coin  which  determined  their  value;  and,  there- 
fore, should  be  made  an  asset  of  the  government  that 
would  enure  to  the  equal  benefit  of  all  the  people,  and  not 
the  exclusive  benefit  of  a  few. 

If  he  had  been  able  to  throw  off  his  fetish  worship  for 
the  metals;  realize  that  the  issue  of  money  was  a  func- 
tion of  government;  and  that  the  power  of  tender  was 
the  cause  of  the  value  of  the  use  of  gold  and  silver  coin, 
he  could  have  improved  on  his  idea  that  the  government 
should  own  the  mines  of  precious  metals,  by  giving  gold 
and  silver  the  exclusive  right  to  be  exchanged  for 
governmental  legal  tender  notes,  at  some  assigned 
labor  value  given  the  unit  of  the  Money  of  Account,  /.  e., 
the  word,  "dollar."  But  instead  of  having  a  com- 
prehensive understanding  of  the  science  of  the 
subject-matter,  Hamilton  accepted  the  prevalent  error 
that  gold  and  silver  were  value;  that  the  istsue  of  money 
was  a  private  right;  and  endeavored  to  graft  on  the 
intrinsic-value  system  of  the  Constitution  "use-value"' 
practices  to  aid  in  the  support  of  the  government. 

Jefferson  came  to  his  assistance,  but  the  extent  of  the 
information  of  the  two  is  shown  in  the  selection  of  the 


THE  EVOLVTIOy  OF  MONEY.  63 

words  dollai-s,  dimes,  cents,  and  mills,  as  the  "word^  of 
value,"  or,  following  Sir  James  Stewart,  as  the  "'words 
of  onr  Money  of  Acconnt,"  naming  the  ''word,"  dollar, 
as  the  Unit. 

If  they  had  comprehended,  when  they  decided  on  the 
^'words,''  dollars,  dimes,  cents,  and  mills  as  the  ''Money 
of  Account,-'  that  those  words  were  to  be  used  as  expres- 
sions of  labor;  and  when  they  designated  the  word,  "dol- 
lar," as  the  ''Unit  of  the  Money  of  Account,"  that  they 
meant  the  "unit  of  labor;"  and  that  representatives  of 
those  "words"  were  only  needed  to  settle  balances,  serve 
as  substitutes  for  the  labor  obligations  of  the  people,  and 
to  conduct  the  cash  system,  they  would  have  seen  the  in- 
congruity and  inconsistency  of  selecting  gold  and  silver, 
and  giving  them  the  legal-tender  power,  Avhen  all  that 
was  necessary  to  make  the  things  selected  serve  the  use, 
was  the  power  of  tender — not  inherent  worth. 

Having  no  appreciation  of  these  things,  but  accepting 
gold  and  silver  as  value,  they  perfected  the  intrinsic-value 
system  by  deciding  that  the  value  of  the  Unit  of  the 
Money  of  Account,  viz :  the  "word,"  dollar,  should  be 
3711/4  grains  of  silver,  and  that  its  full  equivalent  should 
be  l-lo  part  in  weight  of  gold.  Gold  and  silver — at  this 
valuation — were  given  the  legal-tender  power;  and  the 
value  of  their  enforced  use  and  inherent  worth  has  been 
regarded  as  the  intrinsic-value  Avhich  made  them  the 
standard,  and  measure,  of  the  lahnr  that  inai/  he  in 
produets. 

This  was  the  constitutional  intrinsic-value  system  ujton 
which  Hamilton  endeavoi-ed — doubtless  assisted  by  Jef- 
ferson— to  engraft  his  "use-value"  pi-actices,  when  he 
asked  for  authority,  as  Secretary  of  the  Treasury,  to  issue 
notes  that  they  might  enable  taxation  to  support  the  gov- 
ernment. ^Vhen  lie  realized  that  the  intrinsic-value  bene- 
ficiaries had  more  inllnciice  with  Uongiess  than  tin;  Ad- 
ministration, he  saw  the  danger  of  their  avarice,  and  cast 


64  THE  EVOLUTION  OF  MONEY. 

about  for  some  protective  measure  that  would  guard  the 
people  I'rom  their  aggressions. 

The  theory  of  the  banking  system  of  England  was  well 
known  to  him,  and  while  it  may  not  have  met  the  idea 
of  safety  conveyed  in  his  sixth  Continental  letter,  it  was 
the  best  that  could  be  done  in  the  knowledge  of  the  science 
of  finance  at  that  time;  and  he  hastily  prepared  a  bill 
along  the  lines  of  the  theory  and  practices  of  the  Bank 
of  England,  as  the  best  safeguard  that  could  then  be 
devised. 

Congress  passed  his  bank  act,  notwithstanding  the 
power  to  grant  a  charter  had  been  withheld  from  it,  and 
gave  the  bank  authority  to  issue  notes,  notwithstanding 
the  power  "to  emit  bills  of  credit"'  had  been  withheld. 
The  result  of  this  legislation  was  to  give  certain  gold 
and  silver  owners  the  right  to  the  value  of  the  use  of  the 
notes  of  a  bank,  or  ''use-value,''  for  twenty  years  in  order 
that  they  might  provide  money  for  the  government  and 
the  people,  until  enough  gold  and  silver  could  be  found. 

Under  the  provisions  of  the  act — granting  a  charter  to 
the  First  Bank  of  the  United  States — the  entire  issue  of 
use-value  money  was  turned  over  to  that  institution  for 
twenty  years,  for  Congress  obligated  itself  not  to  grant 
another  charter  for  that  period. 

The  Bank  was  capitalized  with  all  the  gold  and  silver 
its  owners  and  the  government  could  command,  with  the 
right  to  issue  four  dollars  of  bank-notes  on  each  and 
every  dollar  of  gold  and  silver  in  its  vaults,  which,  it  was 
thought,  would  enlarge  the  official  representatives  of  the 
"words"  of  the  Money  of  Account,  until  they  would  be 
sufficient  to  settle  the  balances  in  the  ''credit-system," 
act  as  substitutes  for  the  obligations  of  the  i)eople,  and 
conduct  the  cash  system.  This  gave  the  coin  owners  the 
value  of  the  use  of  the  notes,  or  "use-value,"  in  addition 
to  intrinsic  value,  during  the  next  twenty  years,  for  the 
bank  with  the  right  to  the  use  of  the  notes  was  conferred 
upon  them — ^as  an  excluisive  privilege — for  that  period. 


THE  EVOLUTION  OF  MOXEY.  g5 

If  the  provisions  of  this  bauk-act  had  been  strictly 
enforced,  it  would  have  caused  the  destruction  of  the  gov- 
ernment before  the  expiration  of  the  twenty  yeai's,  for 
though  the  Bank  violated  its  charter  and  iissued  seven, 
and  probably  more,  dollars  of  bank-notes  on  each  gold 
and  silver  dollar  in  its  vaults,  the  scarcity  of  money 
caused  such  distress — even  with  the  use  of  all  these  bank- 
notes— the  people  would  have  revolted. 

No  one  who  had  gold  and  silver  would  carry  it  to  the 
mint  to  be  coined  into  dollars  to  be  placed  in  competition 
with  bank-notes,  each  of  which  had  as  much  value  in  its 
use,  or  "■use-value,"  as  the  coin  dollar,  though  four  notes 
had  been  issued  on  each  coin  dollar  in  the  bank;  and 
when  Congress  showed  such  respect  for  the  legalized  graft 
of  the  First  Bank,  that  it  would  not  grant  another  char- 
ter, it  was  realized  the  people  must  "stand  and  deliver" 
to  that  bank,  or  find  relief. 

Under  this  monopoly  of  intrinsic  value  and  "use-value" 
iu  one  bank,  the  people  Avere  deprived  of  the  use  of  any 
additional  gold  and  silver  that  came  into  the  country, 
unless  the  owners  were  willing  to  put  it  into  active 
service  at  from  one-fourth  to  one-seventh  the  value  that 
the  Bank  was  using  gold  and  silver;  for  it  was  issuing 
from  four  to  seven  of  its  notes  on  every  coin  dollar  in  its 
vaults. 

This  monopoly  of  coins  and  "use-value"  notes  was  the 
cause  of  the  distress  of  the  people;  and  when  the  First 
Bank  failed  to  issue  more  notes;  when  Congress  would 
not  grant  another  charter;  and  the  owners  of  additional 
gold  and  silver  would  not  put  their  coin  dollars  into 
circulation  to  com])ete  with  the  bank-notes,  the  ])e<)ple  of 
the  states  induced  the  Legislatures  to  do  for  the  addi- 
tional gold  and  silver,  what  Congress  would  not  do — put 
it  on  equal  terms  with  the  gold  and  silver  of  the  First 
Bank.  Therefore  the  State  legislatures  paid  no  attention 
to  the  constitutional    inhibition    that   a   State   shall   not 


66  THE  EVOLVTIOy  OF  MOyEY. 

''emit  bills  of  credits,"  and  all  of  them  chartered  banks 
with  authority  to  issue  three  times  as  much  ''use-value" 
notes  as  there  Avas  gold  and  sih-er  held  in  the  vaults  of 
the  banks. 

The  States  not  only  chartered  one  bank  each,  but  they 
chartered  as  many  as  was  applied  for,  and  the  incorpora- 
tors virtually  wrote  the  laws.  The  State  Banks, 
like  the  First  Bank  of  the  United  States,  were 
given  the  right  to  both  the  intrinsic  and  '"use-value"  sys- 
tems; and  the  monopoly  of  the  First  Bank  was  destroyed 
by  the  competition. 

While  the  State  Banks  were  not  as  large,  in  their  cap- 
italization and  as  immense  in  their  volume  of  business, 
as  the  First  Bank,  the  legalized  graft  was  proportion- 
ately much  greater,  for  there  was  such  careless  super- 
viision  over  them  that  the  same  gold  and  silver  was  used 
to  organize  different  banks;  and  so  many  notes  were  is- 
sued that  the  value  of  their  use,  or  their  "use-value," 
became  so  cheapened  it  was  an  advantage  to  the  people 
that  more  than  compensated  the  loss  of  the  panic  that 
was  precipitated  when  demand  was  made  that  they  be 
paid  in  coins. 

The  State  Banks  necessarily  destroyed,  in  great  part, 
the  graft  of  the  First  Bank;  and  the  cheapened  use,  or 
service,  of  the  bank-notes  saved  the  existence  of  the  gov- 
ernment. 

No  people  in  the  history  of  the  world  ever  had  such 
an  abundance  of  "use-value"  money,  and  no  people 
ever  prospered  as  did  the  people  of  this  country  with  the 
assistance  of  the  cheap  bank-notes,  notwithstanding  the 
periodic  and  heavy  losses  incurred  by  the  criminal  appli- 
cation of  intrinsic-value  law  to  their  "use-value"  practices, 
which  created  the  panics. 


CHAPTER   VI. 


HE  graft  embodied  in  the  two  systems  of  bank- 
ing created  factions — known  as  parties — that 
have  struggled  for  the  control  of  the  United 
States. 

The  history  of  this  country  is  the  history  of  the  yary- 
ing  fortunes  of  the  two  factions,  as  they  have  contended 
under  varying  and  changing  alignments. 

The  change  in  the  goyernment  from  an  intended  lie- 
public  to  a  plutocracy,  has  been  caused  by  the  legal 
abuses  necessary  to  sustain  the  right  of  the  gold  and 
silver  owners  to  the  exclusive  enjoyment  of  ''use-value," 
intrinsic-value,  and  the  Legal-Tender  power  of  the  gov- 
ernment. 

In  other  words,  the  change  has  been  necessary  to  secure 
to  the  gold  and  silver  owners — and  now  the  gold  owners 
alone — the  exclusive  enjoyment  of  all  the  benefits  that 
necessarily  accrue  from  the  exercise  of  the  sovereign 
power  to  issue  money — the  most  dominant  of  all  the  sov- 
ereign powers  of  a  people. 

The  first  abuse  was  in  su])port  of  the  First  Bank  of 
the  United  States,  and  was  judicial. 

The  State  of  Georgia  assessed  a  branch  of  the  First 
Bank.  The  bank  refused  to  j»ay  the  tax.  The  sheriff 
collected  it  by  force.  The  bank  sued  the  sheriff'  for  the 
return  of  the  money.  The  State  Courts  gave  judgment  in 
favor  of  the  sheriff.  The  bank  then  sued  the  sheriff'  in 
one  of  the  inferior  United  States  Courts.  It  dismissed 
the  case  on  the  ground  tliat  it  had  no  jurisdiction.  The 
bank  appealed  to  the  Sui)reme  Court  of  the  United  States. 

The  issue  in  the  case  was,  whether  a  corporation — such 
as  the  bank — was  a  citizen. 


68  THE  EYOLUTIoy  OF  MOXEY. 

If  not,  the  Fnited  States  Courts  had  no  jurisdiction, 
for  their  jurisdiction  was  limited,  in  controversies  aris- 
ing between  the  people,  to  the  citizcjis  of  different  States. 

The  word  citizen  was  also  selected  to  exclude  the  cor- 
porations of  one  State  from  being  entitled  to  the  rights, 
privileges,  and  immunities  that  had  been  secured  to  the 
people  of  each  State,  in  all  the  States. 

The  purpose  in  selecting  the  word  citizen  was  to  con- 
tine  the  exercise  of  the  rights  of  corporations  to  the  limits, 
and  the  jurisdiction,  of  the  State  granting  the  charter; 
for,  if  corporations — in  the  exercise  of  their  charter 
rights — were  to  be  confined  to  the  State  granting  the 
charter,  then  the  State  Courts  should  have  exclusive 
jurisdiction  over  them. 

The  power  to  grant  charters,  as  well  as  the  power  "to 
emit  bills  of  credit,''  had  been  withheld  from  Congress. 

It  was  not  supposed  that  Congress  wooild  ignore  this 
action  of  the  framers  of  the  Constitution,  and  attempt 
to  confer  the  detested  "use-value,"  /.  e.,  the  use  of  bank- 
notes, on  gold  and  silver  by  the  grant  of  a  charter  for 
a  bank,  and,  therefore,  there  was  nothing  in  the  Constitu- 
tion that  was  intended,  or  should  have  been  construed, 
to  refer  to  a  corporation  chartered  by  Congress. 

But  after  Congress  had  seen  proper  to  grant  a  charter 
to  a  bank  for  twenty  years,  with  the  right  to  issue  notes, 
and  that  bank,  in  a  controversy  with  a  citizen  of  a  State, 
had  appealed  to  the  United  States  Supreme  Court,  the 
chief  thing  to  be  considered  was  the  effect  the  decision 
might  have  upon  the  right  of  the  States  to  exclusive 
jurisdiction  over  their  corporations. 

This  seems  to  have  been  the  view  at  first  taken  by  the 
Supreme  Court,  for  it  decided,  in  the  First  Bank  vs. 
Deveau.i-.  5  Cranch  Eepts.,  Gl,  that  a  corporation  was 
not  a  citizen;  but  in  its  desire  to  protect  the  bank  from 
the  hostility  of  the  State  governments,  it  ignored  the 
rights  of  the  States  and  decided  further  that  it  could  look 


THE  EVOLlTIoy  OF  MOyEY.  69 

through  the  corporation  as  a  faculty,  aud  see  who  coui- 
l>osed  the  stockholders.  When  it  appeared — as"  the  de- 
cision states — that  the  stockholders  were  citizens  of 
Pennsylvania,  and,  as  such,  had  the  right  to  the  jurisdic- 
tion of  the  Federal  courts,  jurisdiction  was  taken,  and 
the  iSupreme  Court  gave  the  bank  relief,  regardless  of 
the  eflect  the  decision  would  have  upon  the  rights  of  the 
^^tate  courts  to  exclusive  jurisdiction  over  their  corpora- 
tions. 

This  determination — manifested  by  a  partisan  judi- 
ciary— to  secure  for  the  gold  and  silver  owners  both 
intrinsic  value  and  ''use-value"  has  never  abated,  and,  as 
a  result,  corporations  of  all  kinds  are  citizens,  not  only 
enjoying  the  rights,  privileges,  and  immunities  of  all  the 
States,  but  the  protection  of  the  courts  of  the  United 
States. 

Jefferson's  feelings,  if  not  his  intelligence — as  to  the 
issue  of  money — were  more  democratic  than  Hamilton's, 
and  he  realized — while  both  the  Congressional  bank  and 
the  State  bank  systems  were,  in  their  right  to  apply 
intrinsic-value  law  to  ••use-value"  practices,  erroneous — 
that  the  people  Avere  more  benefited  by  the  increasing  use 
of  State  bank-notes  than  by  the  restricted  use  of  the 
Congressional  bank-notes.  He  therefore  organized  the 
faction  known  in  that  day  as  the  Eepublicaii  Party,  to 
get  rid  of  the  First  Bank  of  the  United  States,  and  leave 
the  issue  of  money  to  gold,  silver,  and  the  State  Banks 
until  something  better  could  be  devised.  He  aligned  him- 
self with  the  State  Bank  faction,  and  they  took  charge 
of  the  government.  His  faction  was  in  control  when  the 
charter  of  the  First  Bank  of  the  T'nited  States  expired, 
in  1801);  and  after  it  was  refused  a  renewal,  it  declaied 
war  against  Jefterson,  the  State  P)anks,  and  the  Bepub- 
lican  Party. 

Shortly  after  the  refusal  to  renew  the  charter  of  the 
First  Bank,  the  government  became  involved  in  the  War 


70  THE  EVOLUTION  OF  MONEY. 

of  1812.  The  war  had  to  be  financed  by  the  Treasury  and 
the  State  banks. 

The  State  banks,  confident — after  they  had  caused 
Congress  to  refuse  a  renewal  of  the  charter  to  the  First 
Bank — that  they  now  had  the  exclusive  right  to  the  issue 
of  money — both  by  the  use  and  intrinsic-value  systems — 
showed  their  patriotism  in  the  following  liberal  terms 
on  which  they  would  finance  the  war:  They  would  only 
agree  to  exchange  their  notes  for  the  interest-bearing 
bonds  of  the  government  at  80  cents  on  the  dollar,  though 
they  were  payable  in  coin,  and  though  the  States  allowed 
them  to  issue  four  notes  on  every  dollar  of  coin.  The 
interest  on  their  coin  was  five-fold  until  the  bonds  were 
paid,  when  their  principal  was  enlarged  fivefold. 
This  unpatriotic  legalized  graft  of  the  State  banks  was 
wormwood  and  gall  to  those  who — as  owners  of  the 
First  Bank — once  had  the  exclusive  right  to  the  graft; 
and  as  they  held  Jeft'erson  responsible  for  their  loss,  they 
cursed  and  abused  him,  and  have  reviled  his  teachings  to 
this  day.  They  so  bitterly  resented  the  State  banks"  enjoy- 
ment of  the  graft,  that  they  refused  to  join  in  it,  and 
invested  their  gold  and  silver  in  English  bills  of  exchange 
at  Quebec.  The  effect  of  drawing  this  gold  and  silver  from 
circulation,  and  loaning  it  to  England,  drew  so  much  out 
of  the  State  banks  that  it  was  easy  to  break  all  of  them  by 
the  application  of  intrinsic-value  law  to  their  "use-value'' 
practices.  The  State  banks  were  forced  to  suspend,  and  in 
this  contingency  the  government  made  such  use  of  the 
notes  of  the  suspended  banks  as  it  could,  but  was  com- 
pelled to  issue  its  own  notes  to  sustain  the  war.  The  use 
of  its  owm  notes  was  so  efficient  that  the  war  was  waged 
to  a  successful  termination. 

The  warfare  against  the  notes  of  the  suspended  State 
banks  was  continued  until  they  became  so  inefiicient  that 
Congress  was  induced,  in  1816,  to  sell  to  the  traitors  in 
the  war  of  1812  a  charter  for  the  Second  Bank  of  the 
United  States. 


THE  EVOLVTIOy  OF  MONEY.  71 

According  to  the  terms  of  the  sale  Congress  was  to 
retire  its  legal-tender  or  "nse-vahie"'  notes,  take  part  of 
the  stock,  and  place  all  the  money  of  the  government  in 
this  bank. 

Congress — in  its  effort  to  carry  out  its  contract  with 
the  Second  Bank — authorized  the  issue  of  interestrbearing 
coin  bonds  to  take  np  its  legal-tender,  or  "use-value 
notes;  but  the  service  or  use  of  the  notes  was  so  much 
more  valuable  to  the  people  than  any  service  or  use  they 
could  make  of  the  bonds,  they  would  not  make  the  ex- 
change. The  Bank  complained  of  this  violation  of  the 
agreement,  for  to  the  extent  the  notes  remained  in  circula- 
tion and  served  the  needs  of  the  people,  to  that  extent 
their  ''use-value"  deprived  the  Bank  of  the  value  of  the 
use  of  its  notes.  Therefore,  the  Secretary  of  the  Treasury 
issued  an  order  that  the  notes  of  the  government  would 
only  be  received  in  payment  of  government  dues  at  a 
designated  place — though  they  Avere  issued  as  legal- 
tenders  in  the  payment  of  all  debts  due  the  government. 

Here  was  a  conflict  of  contracts.  When  the  government 
issued  the  notes,  it  was  with  the  express  agreement  that 
the  people  should  have  the  right  to  use  them  in  all  pay- 
ments to  the  government.  This  gave  them  full  legal- 
tender,  or  "■use-value,-'  for  that  purpose,  and  the  jDeople 
were  availing  themselves  of  the  value  of  that  service, 
until  the  gold  and  sih'er  owners  influenced  Congress, 
for  a  consideration,  to  take  the  value  of  that  service 
aAvay  from  the  people,  and  confer  it  on  them. 

T'nder  its  contract  with  the  Bank  the  government 
should  have  invited  the  people  to  exchange  the  legal- 
tender,  or  ''use-value,"  notes  of  the  government  for  bonds, 
and  if  they  did  so  the  contract  with  the  bank  could  have 
been  carried  out. 

The  officials  then  were  like  officials  now — all  contracts 
with  the  Money  Power  must  be  resijected,  notwithstand- 
ing any   contract  with   the  people — and   the  order  was 


72  TEE  EVOLUTION  OF  MONEY. 

issued  tliat  the  government  notes  would  not  be  received 
except  at  the  designated  place. 

This  order  was  resisted;  a  case  made  for  the  courts, 
and  the  officials  of  the  government  were  made  to  respect 
its  contract  with  the  people.  (23  Federal  Cases,  p.  1124.) 

There  seems  to  have  been  some  virtue  in  the  judiciary, 
in  matters  of  money  at  that  time,  but  little  in  Congress, 
for  it  deprived  the  notes  of  their  legal-tender  quality, 
thereby  enabling  the  Bank  to  destroy  the  value  of  the 
service  thej  were  rendering  to  the  people,  which  enabled 
the  Bank  to  get  hold  of  and  exchange  them  for  the 
bonds. 

The  warfare  between  the  State  banks  and  the  Second 
Bank  continued,  and  a  fatal  move  was  made  b^'  the  State 
bank  faction  when  the  State  of  Maryland  assessed  a 
prohibitive  tax  upon  the  operations  of  the  branch  of  the 
Second  Bank  located  at  Baltimore.  The  bank  refused  to 
pay  the  tax.  The  State  Courts  gave  judgment  for  its 
collection.  The  bank  appealed  to  the  Supreme  Court  of 
the  United  States.  [4  Wheaton  (S.  C.  Rep.),  518.]  The 
issues  in  the  case  were: 

1.  Congress  had  no  power  to  grant  the  charter  to  the 
Bank. 

2.  Congress  had  no  power  to  authorize  the  Bank  to 
issue  notes. 

3.  The  State  of  Maryland  had  no  right  to  tax  the  Bank 
out  of  the  State. 

The  third  issue  was  made  by  the  Second  Bank,  not- 
withstanding the  Supreme  Court  had  decided  in  the  case 
of  the  First  Bank  vs.  Deveaiix  (5  Cranch's  Reports,  61), 
that  a  State  had  the  absolute  right  to  tax  anything  that 
was  in,  came  within,  or  wa*s  brought  into  the  State,  and 
that  there  was  no  escape  from  unequal  or  unjust  taxation 
except  in  the  equitable  conduct  of  subsequent  State  legis- 
latures. Therefore  there  Avas  danger  to  the  Second  Bank 
from  the  prohibitive  tax  of  the  State  of  ^laryland,  even  if 
the  Supreme  Court  should  decide  that  Congress  had  both 


TEE  EVOLUTION  OF  MONEY.  73 

the  power  to  graut  the  cluirter  to  the  Second  Bank,  and 
the  right  to  authorize  the  bank  to  issue  notes;  for  if  the 
Supreme  Court  respected  its  former  decision,  the  Second 
Bank  could  not  operate  in  the  State  of  Maryland  unless 
it  paid  the  tax,  nor  in  any  of  the  other  States  that  might 
see  proper  to  impose  a  prohibitive  tax.  In  the  fear  of 
such  a  decision,  and  to  secure  the  assistance  of  corporate 
activity  free  from  hostile  interference  of  the  States,  the 
Second  Bank  sought  to  utilize  a  case  in  New  Hampshire, 
where  the  Legislature  had  passed  laws  changing  the  terms 
of  a  charter  granted  by  the  King  of  England  before  the 
Kevolution.  It  was  hoped  to  utilize  this  case  by  having 
the  Supreme  Court  decide  that  the  grant  of  a  charter  was 
a  contract,  and,  as  such,  protected  by  the  clause  of  the 
Federal  Constitution  that  no  State  should  impair  the 
obligation  of  a  contract. 

All  the  interest  in  the  Maryland  case  was  at  once 
transferred  to  the  New  Ham]jshire  case,  and  it  was  hur- 
ried to  the  Supreme  Court  and  tried  one  month  before 
the  Maryland  case.  TJie  issue,  whether  the  grant  of  a 
charter  was  a  contract,  could  have  been  made  in  the  Mary- 
land case,  and  the  decision  confined  to  grants  made  by 
Congress. 

This  would  have  preserved  the  rights  of  the  States  to 
exclusive  jurisdiction  over  their  own  corporations,  and 
saved  the  right  of  the  Second  Bank  to  oi)erate  in  the  State 
of  Maryland,  if  the  exercise  of  tlie  power  should  liave  been 
held  to  be  constitutional,  but  it  would  not  have  given  the 
right  to  make  that  use  of  the  State  corporations  which 
is  now  causing  such  civic  unrest. 

When  it  was  decided  that  the  grant  of  a  cliarter 
by  the  King  of  England  was  a  contract  which  the  sover- 
eignty of  New  Hampshire  must  respect,  reason  stood 
appalled,  for  it  was  a  principle  unknown  to  human  intel- 
ligence and  has  never  l>een  accejjicd. 

The  intention  to  secure  a  decision  in  tlu>  New  Hamp- 
shire, or  ''Dartmouth  College,"  case  which  could  l)e  util- 


74  THE  EVOLUTION  OF  MONET. 

ized  to  aid  the  Second  Bank  in  the  decision  of  the  Mary- 
land case,  became  so  shameless  in  the  hatred  engendered 
by  the  factional  fight  that  the  majority  members  of  the 
Court  seem  to  have  lost  sight  of  the  dignity  of  their  high 
offices,  in  the  malignancy  with  which  they  decided  this 
case.  They  not  only  held  that  Congress  had  the  power  to 
grant  the  charter  to  the  bank  with  authority  to  issue 
notes,  when  they  knew  both  powers  had  been  withheld 
from  Congress,  but  they  modified  their  previous  decision, 
that  a  State  had  the  absolute  and  uncontrollable  sovereign 
power  to  tax  when  they  decided  that  the  State  of  Mary- 
land could  not  exercise  that  power  to  destroy  the  opera- 
tions of  the  bank  chartered  by  Congress. 

The  decision  in  the  Maryland  case  was  an  infringement 
upon  the  absolute  right  of  the  States  to  exercise  their 
reserved  sovereign  power  to  tax;  and  the  decision  in  the 
^'Dartmouth  College"  case  was  an  infringement  upon  the 
exclusive  right  of  the  States  to  exercise  their  reserved 
sovereign  power  to  regulate  and  control  their  corpora- 
tions. For  if  the  grant  of  a  charter  by  a  State  is  a  con- 
tract, then  any  action  of  a  State,  in  reference  to  the  exer- 
cise of  rights  under  the  charter,  becomes  subject  to  review 
by  the  Courts  of  the  United  States,  though  a  corporation 
be  not  a  citizen. 

These  decisions  changed  the  provisions  that  the  wisdom 
of  the  framers  of  the  Constitution  intended  should  secure 
to  the  States  exclusive  and  absolute  control  over  their 
corporations,  to  provisions  which  gave  to  the  Courts  of 
the  United  States  supervisory  regulation  over  the  exer- 
cise of  State  sovereign  powers  in  the  regulation  and  con- 
trol of  their  corporations. 

A  superior  wisdom  on  the  part  of  the  Federal  Supreme 
Court  that  is  manifest  in  present  conditions,  and  more 
clearly  shown  in  the  fact  that,  in  practical  effect,  corpora- 
tions— not  the  sovereign  States — now  have  their  repre- 
sentatives in  the  Ignited  States  Senate,  though  in  theory, 
and  osteuisibly,  they  are  representatives  of  the  States. 


THE  EVOLUTION  OF  MONEY.  75 

Whoever  exercises  the  sovereigii  powers  of  the  States 
should  have  representatives  in  the  Senate;  whoever  exer- 
cises the  dominant  sovereign  power  to  issue  money  will 
have  representatives  in  the  Senate;  and  it  should  not  be 
cause  of  surprise  that  corijoratious  have  their  representa- 
tives in  the  Senate,  since  their  owners  exercise  both  the 
sovereign  power  of  Congress  to  issue  money  and  to  lay 
import  taxes,  and  also  exercise  most  of  the  sovereign 
poAvers  of  the  States. 

The  profits  of  ''use-value''  were  being  enjoyed  by  those 
who  owned  and  manipulated  the  banks — State  and  Na- 
tional— and  there  must  have  been  a  demand  for  the  use 
of  all  the  notes  they  had  the  courage  to  issue,  consider- 
ing the  fear  of  the  api^lication  of  intrinsic-value  law  to 
"use-value"  practices.  The  hesitation  to  issue  notes, 
except  upon  the  basis  of  the  proper  amount  of  gold  and 
silver,  was  increased  by  the  watchful  jealousy  of  the 
banks,  and  a  fear  that  a  loss  might  be  sustained  if  any  of 
the  banks  should  fail.  Either  on  this  account  or  from 
some  other  cause,  there  was  such  a  scarcity  of  both 
intrinsic-value  and  ''use-value"  money  in  the  State  of 
Missouri  that  this  State  was  moved,  in  tender  considera- 
tion of  the  distress  of  its  people,  to  render  them  necessary 
assistance. 

Missouri,  therefore,  without  the  intervention  of  a 
bank,  devised  a  safe  scheme  by  which — until  gold,  silver, 
and  bank-notes  could  be  secured — it  could  furnish  its 
people  the  "use-value"  money  so  necessary  to  the  advance- 
ment of  their  prosperity. 

A  case  was  soon  made  denying  the  right  of  Missouri 
to  furnish  "use-value''  notes  to  its  people.  The  case 
reached  the  Supreme  Court  of  the  United  States  [Craig 
vs.  The  State  of  Missouri  (4  Peters,  10)],  and  the  same 
members  who  had  decided  that  Congress  had  the 
power  to  grant  to  a  few  gold  and  silver  owners  a 
charter  for  a  bank,  with  authority  to  issue  notes,  decided 
that  Missouri  could  not  render  assistance  to  its  people 


76  THE  EVOLVTIOy  OF  MONEY. 

by  the  issue  of  notes,  however  severe  their  distress  from 
the  scarcity  of  money,  because  it,  in  effect,  supplied  them 
with  the  "use-value"  which  belonged  to  the  owners  of 
gold  and  silver,  and  their  banks. 

The  people  of  Missouri  were  compelled  to  wait  for  their 
prosperity  until  the  gold  and  silver  owners  would  find 
it  profitable  to  come  with  their  banks  and  share  it  with 
them  on  such  terms  as  they  might  see  proper  to  impose. 

This  decision  of  the  Federal  Supreme  Court  emboldened 
the  Second  Bank  to  make  an  effort  to  get  rid  of  the  State 
banks,  and  secure  for  itself  a  monopoly  of  the  benefits 
of  "use-value." 

A  case  was  made  in  Kentucky,  because  that  State 
was  operating  a  bank  as  a  State  institution,  and  it  was 
more  like  the  Missouri  case  than  those  instances  where 
the  States  granted  charters  to  individuals  to  operate 
banks,  and  issue  notes. 

This  case  reached  the  Supreme  Court  of  the  United 
States  (Briscoe  vs.  The  Bank  of  Kentucky,  11  Peters,  252), 
and  the  same  members  of  the  Court,  who  had  taken  care 
of  the  Second  Bank  of  the  United  States,  decided  that 
the  State  of  Kentucky  violated  the  constitutional  inhibi- 
tion against  any  State  emitting  bills  of  credit  when  it 
authorized  the  bank  to  issue  notes ;  but  before  the  decision 
became  binding  the  leading  member  died. 

The  Supreme  Court  had  been  composed  of  four  Second 
Bank  judges,  and  three  State  Bank  judges.  The  death 
of  the  leading  Second  Bank  judge,  and  the  appointment 
of  another  State  Bank  Judge,  reversed  the  majority  in 
favor  of  the  State  banks,  and  the  case  was  reheard.  The 
decision  upon  the  reargument  was  a.s  shamelessly  in  favor 
of  State  banks  as  the  former  had  been  in  favor  of  the 
Second  Bank  of  the  United  States. 

The  States,  the  Ignited  States,  and  the  People  were 
left  without  any  protection  from  the  impositions  of  the 
gold  and  silver  owners.  The  States  had  been  refused  the 
right  to  furnish  the  people  with  the  "use-value"  notes 


THE  EVOLVTIOX  OF  MOyEY.  ^^ 

necessary  to  sustain  the  States,  and  enable  the  people  to 
support  themselves,  but  they  could  gives  the  exercise  of 
the  right  to  the  bankers.  The  power  "to  emit  bills  of 
credit,"  as  well  as  the  power  to  grant  charters  of  incor- 
poration, had  been  withheld  from  Congress,  but  the 
Supreme  Court  had  decided — in  the  interest  of  the  gold 
and  silver  owners — that  Congress  had  the  right  to  exer- 
cise both  powers.  The  contention  that  Congress  had  the 
power  to  authorize  the  issue  of  notes,  and  make  them 
tenders  in  the  payment  of  debts,  both  public  and  private, 
was  denominated  the  heresy  of  heresies.  The  x^eople  could, 
therefore,  be  given  no  protection  from  the  human  harpies 
that  have  helloed  themselves  at  every  feast  that  has  been 
spread  by  nature  and  the  labor  of  the  people;  and  yet 
the  munificence  of  the  Xew  World  was  such  that  they 
prospered  in  spite  of  the  harpies,  and  the  panics  they 
would  periodically  create. 

The  charter  of  the  Second  Bank  expired  in  18.30.  Pow- 
erful and  influential  as  it  was,  the  bank  suspected  that 
Jackson  was  hostile  to  it,  and  its  managers  purchased 
from  Congress  a  renewal  of  its  charter  during  his  first 
administration.  In  the  consciousness  that  they  had  more 
influence  with  the  political  party  which  elected  Jackson 
than  Jackson  had,  they  presented  their  bill  for  his 
approval.  Jackson  vetoed  the  bill  and  the  war  between 
him  and  the  Second  Bank  was  on.  It  was  soon  evident 
they  had  taken  the  ])arty  from  Jackson,  and  had  left  him 
stranded.  That  is  generally  enough  for  any  aspirant  for 
the  Presidency,  but  was  not  for  Jackson.  He  was  a 
political  party  in  his  own  individuality. 

Jackson  was  not  informed  in  the  matter  of  finance, 
but  he  had  sense  enough  to  know  that  he  knew  as  much 
as  those  who  were  claiming  full  knowledge  of  the  subject. 
He  sensed  far  beyond  his  knowledge;  and  when  the 
President  of  the  Ignited  States,  in  his  person,  was  defied 
by  the  mere  managers  of  a  financial  institution,  he  kmnv 
it  ought  to  be  destroyed.    In  his  battle  lust,  his  i)erc(>i»tion 


78  THE  ETOLVTION  OF  MONEY. 

became  so  acutely  sensitive  that  he  intuitively  divined  the 
weak  spot  of  his  adversary ;  and  it  did  not  take  him  long- 
to  come  to  the  conclusion  that  the  weakness  of  the  mana- 
gers of  the  bank  was  their  willingness  and  their  efforts 
to  corrupt  the  electorate.  Jackson  at  once  charged  them 
with  this  crime,  convicted  them  before  the  people,  and. 
with  the  assistance  of  Benton,  was  re-elected.  He  had 
no  respect  for  the  decision  of  the  fc^upreme  Court,  so  un- 
patriotically  partial  to  the  Second  Bank,  and  refused  to 
be  bound  by  it,  stating,  in  effect,  that  he  had  sworn  to 
uphold  the  Constitution,  as  it  was  intended — not  as  it 
was  construed  by  the  partisan  interpretation  of  that  body. 
The  corruption  of  the  managers  was  such  he  was  unwilling 
for  the  money  of  the  government  to  remain  in  their  bank 
until  its  charter  expired  by  limitation.  He,  thei'efore, 
ordered  the  deposits  to  be  removed  to  the  State  banks, 
though  it  was  claimed  that  such  action  would  precipitate 
a  crisis  which  would  occasion  fearful  loss  to  the  people. 
Jackson  did  not  fear  a  crisis,  and  if  it  could  only  be 
prevented  by  a  seeming  condonation  of  the  corruption  of 
an  unconstitutional  institution,  he  was  willing  for  the 
crisis  to  come,  and  the  responsibility  to 'rest  upon  those 
who  had  galvanized  the  l)ank  into  existence,  and  foisted 
it  upon  the  people. 

Jackson  knew  nothing  of  the  science  of  finance,  and 
he  knew  of  no  one  who  did.  He  felt  and  saw  the  injustice 
and  inequity  of  turning  over  to  banks,  chartered  by  the 
States  and  by  CongreStS,  the  unconstitutional  right  To 
issue  money,  when  the  same  right  was  refused  to  Missouri, 
though  it  would  have  been  more  excusable  to  let  Mis- 
souri unconstitutionally  render  assistance  to  her  people 
than  to  favor  the  few  who  owned  the  banks. 

Jackson  destroyed  the  Second  Bank  when  he  was  made 
to  feel  its  insolence  and  realized  its  corruption ;  and  he 
struck  a  blow  at  the  State  banks,  when  he  saw  that  their 
owners  were  using  their  right  to  issue  money  to  steal 
the  public  lands.     He,  therefore,  became  a  barbarian  in 


THE  EVOLUTIoy  OF  MOSEY.  79 

finance  when  he  issued  an  order  to  enforvc  the  terms  of 
the  Constitution,  and  receive  no  payments  for  public 
lands  except  in  gold  and  silver  coins.  The  discredit  of 
State  bank-notes — after  destrojang  the  Second  Bank — ^vir- 
tually forced  the  countrj-  to  the  hai-harianisni  of  the 
intrinsic-value  system  of  the  Constitution,  and  the  panic 
of  lSo7  resulted. 

Jackson,  in  his  enforcement  of  the  Constitution  as  it 
was  intended,  gave  the  country  one  experience  of  a  civ- 
ilization without  "use-value,''  and  it  should  have  been 
sufhcient,  for  the  distress  of  the  jjeople  was  such  that  his 
successor  had  to  call  a  special  session  of  Congress. 

It  was  not  Jackson's  fault  that  the  enforcement  of  the 
financial  part  of  the  Constitution  was  so  fatal,  but  the 
fault  of  those  who  withheld  from  Congress  the  exercise 
of  the  sovereign  ]iower  to  issue  money,  in  order  that  they 
might  bestow  it  upon  the  gold  and  silver  owners;  and 
the  fault  of  those  who  enlarged  the  power  by  giving  the 
gold  and  silver  owners  the  right  to  "use-value''  in  addition 
to  intrinsic  value,  when  Congress  gave  them  a  charter 
for  a  bank  with  authority  to  issue  notes,  and  the  Supreme 
Court  held  it  was  constitutional. 

With  such  dearly-]>urchased  experience  it  would  seem 
there  might  have  been  some  appreciation  on  the  part  of 
Congress  of  the  following  words  of  wisdom  uttered  by 
Senator  Benton :  "The  government  ought  not  to  delegate 
this  power  if  it  could.  It  was  too  great  a  power  to  be 
trusted  to  any  banking  company  whatever,  or  to  any 
authority  but  the  highest  and  most  responsible  whicli  was 
known  to  our  form  of  government.  The  government  itself 
ceases  to  be  independent — it  ceases  to  be  safe — when  the 
national  currency  is  at  the  will  of  a  company.  The 
government  can  undertake  no  great  enterprise,  either 
of  war  or  peace,  without  the  counsel  and  co  o]»oratiou 
of  that  company. 

"The  ]»eo])]e  are  not  safe  when  sucli  a  company  has 
such  power.     The  temptations  are  too  great,  the  oppor- 


go  THE  EYOLUTIOX  OF  MOXEY. 

timitv  too  easy,  to  put  np  and  doAvn  prices,  to  make  and 
break  fortunes,  to  bring  the  whole  community  on  its  knees 
to  the  Neptunes  who  preside  over  the  flux  and  reflux  of 
l>aper." 

The  Senator  indicates  that  he  did  not  realize  that  it 
was  giving  to  a  company  the  exercise  of  the  sovereign 
power  to  issue  money;  for  both  he  and  Senator  Calhoun 
adA'ocated  that  the  government  should  issue  notes — not 
as  a  sovereignty — but  as  a  mere  vendor  of  its  credits 
redeemable  at  some  future  time  in  gold  and  silver  coins. 

The  contention  of  Senator  Benton  was  what  the  gold 
and  silver  owners  claimed  was  an  infringement  on  their 
constitutionally  secured  right;  and  it  was  an  infringe- 
ment so  long  as  the  intelligence  of  Congress  did  not  know 
that  the  issue  of  money  was  the  exercise  of  a  sovereign 
power;  that  the  use  of  money  was  its  value;  and  that  the 
value  of  its  use,  or  its  value,  as  money,  depended  upon 
the  power  of  Tender — not  the  intrinsic  worth  of  gold  and 
silver. 

Congress,  in  1820,  submitted  a  request  to  the  Secretary 
of  the  Treasury,  asking — among  other  things — if  it  was 
practicable  to  substitute  a  paper  for  a  metallic  currency. 

In  his  answer,  the  greatest  Secretary  of  the  Treasury, 
W.  H.  Crawford,  said  he  would  not  assume  that  Congress 
intended  to  ask  him  the  extent  of  its  powers,  ''yet  it  will 
necessarily  occur  to  the  House,''  he  stated,  "that  if  the 
power  of  Congress  over  the  currency  is  not  absolutely 
sovereign,  the  inquiry,  whatever  may  be  its  immediate 
result,  must  always  be  without  ultimate  result." 

He  further  stated  that  "the  general  prosperity  will 
not  be  advanced  by  demonstrating  that  there  is  no  in- 
trinsic obstacle  to  the  substitution  of  a  paper  for  a 
metallic  currency,  if  the  power  to  ado]<t  the  substitute 
has  been  withheld  from  the  Federal  Government."' 

Crawford  could  not  remove  the  fetish  idea  that  gold 
and  silver  was  value,  and,  therefore,  that  the  issue  of 


THE  EVOLUTION  OF  MONEY.  gl 

mouej  was  a  private  right  that  shonkl  only  be  regulated 
by  Congress. 

That  opinion  seems  to  have  prevailed  in  ISSl,  for  Ben- 
ton and  Calhoun  only  proposed  that  the  government 
should  issue  its  notes,  as  a  debt,  to  be  redeemed  in 
intrinsic-value,  when  they  should  have  contended  that  the 
notes  be  issued  as  the  exercise  of  sovereign  power  and 
given  exclusive  legal  tender  in  the  payment  of  debts,  both 
public  and  private. 
6 


CHAPTER  VII. 


N  the  conduct  of  their  business,  the  people  were 
restricted  to  the  use  of  the  notes  of  the  State 
banks,   and   such  coin   as   competed  with  the 
notes  for  ''use-value." 

The  value  of  the  notes  depended  on  their  use ;  their  issue 
depended  on  the  gold  and  silver  that  could  be  secured; 
and  as  there  was  an  incessant  and  increasing  demand 
for  the  use  of  the  notes,  it  became  larger  than  the  metals 
could  legally  supply.  The  bankers  did  as  bankers  always 
do  under  such  circumstances,  used  the  gold  and  silver 
that  ought  to  have  remained  in  the  vaults  to  support  the 
"use-value"  of  the  notes,  to  organize  new  bank's  and  issue 
more  notes.  There  is  not  the  wrong  in  this  that  is  claimed, 
since  it  is  made  an  imperative  necessity. 

The  community  suffers  from  the  want  of  'nise-value" 
to  conduct  business.  The  only  way  to  furnish  this  '"use- 
value,"  under  the  intrinsic-value  system,  is  to  issue  bank- 
notes, mythically,  though  legally  based  upon  gold  and  sil- 
ver; and  if  the  metals  cannot  be  otherwise  secured,  they 
must  be  dishonestly  used  a  second  time  as  a  base  for  bank- 
notes. 

The  danger  is  not  in  the  second  use  of  the  metals  to 
justify  the  issue  of  notes,  but  in  the  system,  and  the 
advantage  that  can  be,  and  is,  taken  of  it. 

The  notes  would  not  have  to  be  issued,  nor  would  it  be 
necessary  to  mint  gold  and  silver  coins,  if  the  govern- 
ment would  exercise  its  sovereign  power  to  issue  its  notes, 
as  legal  tenders. 

The  impossibility  of  the  comparatively  few  coins  serv- 
ing the  use  that  is  served  by  the  credits  of  the  people, 
and  by  the  bank-notes,  causes  a  panic  whenever  a  general 
demand  is  made  for  the  payment  of  the  credits  and  the 
bank-notes  in  the  legal-tender  coins.     The  source  of  the 


THE  EVOLrTIOX  OF  MOyEY.  g3 

danger  is  in  the  right  to  make  the  demand,  which  intrinsic- 
value  law  gives.  The  possibility  of  the  danger  is  in  the 
abilitv  of  some  to  create  conditions  that  will  cause  a  gen- 
eral demand  to  be  made.  The  danger  is  in  the  power  of 
''Tender,"  which  guarantees  the  right  to  make  the  demand, 
and  the  power  of  the  State  and  Federal  Courts,  which 
enforces  the  guarantee. 

Is  it  not,  therefore,  evident  that  the  loss — ^which  the 
people  suffer  from  panics — is,  in  its  last  analysis,  due 
to  the  powers  of  government  that  are  unintelligently  and 
unpatriotically  placed  in  the  hands  of  those  who  will 
create  the  conditions  which  cause  the  demand  to  be  made? 

This  was  the  system  of  finance  from  which  the  i>eople 
suffered  from  18o7  to  18G1,  when  the  government  was 
called  upon  to  preserve  the  entirety  of  its  autonomy. 

Its  sovereign  powers  had  to  be  exerted  to  their  full 
extent,  and  to  the  full  capacity  of  the  people. 

If  it  was  not  known  what  were  the  sovereign  powers 
of  the  government ;  and  if  some  of  them  had  been  regarded 
and  treated  as  private  rights,  the  error  would  now  be 
made  manifest. 

The  government  had  the  right  and  power  to  command 
all  the  resources  of  the  country,  animate  as  well  as  in- 
animate, for  that  is  what  patriotism  demands  when  the 
life  of  the  country  is  at  stake,  and  all  opposition  is 
treason.  If  oi)position  is  animate,  it  should  be  banished; 
if  inanimate,  it  should  be  confiscated  and  ai)pro])riated  to 
the  defense  of  the  country. 

No  consideration  should  be  given  any  claim  to  exer- 
cise a  sovereign  power,  as  a  private  right,  when  it  oper- 
ates to  the  detriment  of  the  peoj)le  and  of  the  govern- 
ment, though  it  is  secured  by  the  Constitution. 

The  blood  of  the  life  of  the  government  is  freely  offered, 
and,  if  not  ottered,  impressed  in  the  defense  of  the  country. 
Its  material  resources  belong  to  its  i)eople,  and,  with  their 
lives,  are  offered  oi'  im])ressed  into  its  service.  There  is 
no  Constitution,  there  are  no  laws  that  are  entitled  to 


84  THE  EVOLUTION  OF  MONEY. 

any  consideration,  if  their  enforcement  conflicts  with  the 
demands  of  patriotism,  A  government  that  can  be  intimi- 
dated into  forcing  patriotism  to  make  sacrifices  in  the 
interest  of  a  clasiS  to  x>reserve  its  autonomy,  is  not  worth 
preserving. 

If  patriotism  was  made  to  suffer  vicariously  because 
the  exercise  of  a  sovereign  power  was  erroneously  thought 
to  be  a  private  right,  and,  as  such,  secured  to  a  class  by 
the  Constitution,  then  when  the  error  is  discovered,  radi- 
cal should  be  the  change  in  the  policies  and  laws  of  the 
government  regardless  of  consequences,  until  the  sover- 
eign power  is  properly  exercised.  It  was  soon  evident 
that  gold,  silver,  and  the  state  bank-notes  could  not  finance 
the  war.  Congress  was  therefore  compelled  to  summon 
"use-value"  to  its  assistance. 

This  was  done — not  by  the  issue  of  legal-tender  notes, 
as  the  exercise  of  a  sovereign  power — but  by  the  issue  of 
notes  payable  on  demand ;  and  yet  the  notes  were  given 
the  sovereign  legal-tender  right  to  be  used  in  the  payment 
of  all  debts  due  to  or  by  the  government. 

This  action  of  Congress  made  the  value  of  the  use,  or 
the  "use-value,"  of  the  "Demand-Notes"  equal  to  the  value 
of  the  use  of  gold  and  silver  coin  in  the  payment  of  all 
governmental  debt ;  and  this  "use-value"  made  them 
current  with  the  people,  though  they  were  not  tenders 
in  payment  of  private  debt. 

Though  the  notes  were  issued  as  a  debt,  the  practical 
efi'ect  of  giving  them  "Tender,"  and  making  them  payable 
only  on  demand,  was  the  same  as  if  they  had  been  issued 
as  an  exercise  of  sovereign  power;  for  the  value  of  their 
use,  or  their  "use-value,"  was  such  that  demand  would 
never  have  been  made  by  the  peoi)le. 

The  coin  owners  and  bankers  realized  this,  and  when 
only  sixty  millions  had  been  issued,  they  induced  Congress 
to  change  the  law  and  retire  the  notes. 

In  the  chanj:e  Congress  admitted  that  the  issue  of 
money  was  a  private  right;   that  its  exclusive  exercise 


THE  EYOLl'TIoy  OF  MOyEY.  85 

was  secured  bv  the  Constitution  and  the  decisions  of  the 
Supreme  Court  to  the  gold  and  silver  owners  and  their 
banks;  and,  therefore,  that  the  law  should  be  so  changed 
that  the  notes  could  not  be  used  to  pay  dues  on  imports, 
or  interest  on  the  bonds. 

These  two  uses,  however,  were  more  than  gold  and  sil- 
ver could  serve,  for  the  greater  part  of  both  left  the 
country,  and  Avhen  an  importer  needed  coins  he  had  to 
]»ay  from  S1.50  to  .fi'.So  for  them  in  the  notes  of  the  gov- 
ernment during  the  four  years  of  the  war,  and  for  years 
after. 

Bpeaking  afterwards  of  this  action  of  Congress,  the 
Hon.  Thad.  Stevens,  a  member  at  the  time,  said :  "Yes, 
we  had  to  yield — the  Senate  was  stubborn.  We  did  not 
yield,  however,  until  we  found  that  the  country  must  be 
lost  or  the  bankers  gratified ;  and  we  sought  to  save  the 
country  in  spite  of  the  cupidity  of  its  wealthier  citizens. 
When  a  few  years  hence  the  people  shall  have  been 
brought  to  general  bankruptcy,  I  shall  have  the  satisfac- 
tion of  knowing  that  I  attempted  to  prevent  it." 

If  the  issue  of  money  is  the  exercise  of  a  sovereign 
power,  and  if,  in  the  prosecution  of  the  war,  the  Govern- 
ment exercised  other  sovereign  powers  to  force  men  to 
leave  home  and  be  shot  to  death,  what  greater  stupidity 
and  craven  servility  to  the  Money  Power  could  be  shown 
than  is  admitted  in  the  above? 

Governments,  as  well  as  men,  however,  must  act  accord- 
ing to  their  intelligence. 

The  most  patriotic  intelligence  of  that  Congress  had 
no  a])j»reciation  that  viler  traitors  than  it  regarded  the 
leaders  of  the  South  were  insolently  and  dominalingly 
asserting  their  constitutional  claim  to  exercise  a  sover- 
eign ])Ower  as  a  ]»rivate  right — for  if  it  had,  those  bank- 
ers would  have  been  thrown  into  jirisons  instead  of  hec- 
toring over  that  ])ody. 

The  profound  iegar<l  everyone  had  been  taught  to  en- 
tertain for  the  Constitution — as  it  was  construed  by  the 


86  THE  EVOLVTIOy  OF  MOAEY. 

Supreme  Coni't — blinded  the  eyes  of  patriotic  intelligence 
to  the  absurdity,  if  not  criminality,  of  exercising  a  sover- 
eign power  as  a  private  right,  at  such  a  time  and  under 
such  conditions. 

Patriotism,  therefore,  was  held  in  leash  to  the  Money 
Power's  assertion  of  its  couistitutional  right  to  exercise 
a  sovereig-n  power  as  a  jjrivate  privilege,  until  Congress 
was  compelled  to  realize  that  if  the  country  was  saved, 
it  must  be  by  the  vicarious  sacrifice  of  life  and  proi^erty 
in  the  interest  of  the  Money  Power. 

And  how  vicarious  was  the  suffering  then,  and  since', 
from  the  assertion  of  the  right  to  exercise  sovereign  power 
as  a  private  graft  may  be  seen  in  the  increase  of  the  wealth 
of  the  Jay  Goulds,  Jay  Cooks,  the  Belmonts,  the  Vander- 
bilts,  and  the  Astors  of  that  period,  and  the  enlarged  for- 
tunes of  some  of  the  same  families,  together  with  the 
fabulous  fortunes  of  the  Carnegies,  the  Eockefellers,  the 
Harrimaus,  the  Ryans,  the  James  J.  Hills,  the  Havemey- 
ers,  the  Armours,  the  Perkinses,  and  others,  of  the 
present  day. 

The  war  was  the  result  of  a  peculiar  civilization.  A 
civilization  of  the  attempted  admixture  of  the  widest  and 
fullest  liberty  with  two  kinds  of  slavery — chattel  and 
industrial.  The  control  at  different  periods  of  the  most 
dominant  of  all  the  sovereign  i»owers  made  it  possible  for 
each  set  of  masters  to  have  their  day  of  supremacy. 

The  struggle  for  the  control  of  the  government  has 
been  between  the  Aristocracy  of  land  and  slaves,  /.  c, 
the  Aristocracy  of  culture,  intellect,  and  caste  on  the  one 
side,  and  the  Plutocracy  of  money  and  industrial  slavery, 
/.  e..  the  Plutocracy  of  avarice,  venal  intellectuality, 
bestial  lust  for  .social  recognition  and  power  on  the  other 
side,  under  a  so-called  democratic  or  republican  form  of 
government. 

That  men  of  the  highest  intelligence  live  and  die  in 
deepest  ignorance  of  what  most  vitally  concerns  them  is 
shown  bv  the  statement  that   this  government   was  an 


THE  EVOLUTION  OF  MOyEY.  87 

Aristocracy  of  laud  and  slaves  up  to  1860,  and  since  a 
Plutocracy  of  uioueT  and  industrial  slavery;  and  yet,  in 
theory,  it  has  been  administered  as  a  Democracy,  or  a 
Kepublic,  when  in  fact  the  country  has  never  existed  as 
a  democracy  or  a  republic,  for  a  day. 

The  factions  that  attitudinize  as  the  Democratic  and 
Republican  parties  have  no  known  principles  nor  con- 
victions that  abide  with  the  majority  of  either;  and  the 
most  indeterminate  thing  in  the  realm  of  intelligence  is 
what  are  democratic  or  republican  principles,  under  this 
form  of  government?  And  who  are  democrats  and  who 
are  republicans  may  be  best  answered  by  stating  who  is 
in  present  control  of  the  two  factions. 

Democracy,  or  Republicanism,  means  government 
where  all  of  the  sovereign  powers  are  exclusively  exer- 
cised in  the  equal  interest  of  all  the  people,  and  none  are 
exercised  in  the  interest  of  a  class,  and  so  long  as  the  exer- 
cise of  the  sovereign  power  to  issue  money  is  turned  over 
to  a  class,  or  so  exercised  that  a  class  has  the  exclusive 
right  to  the  benefits  that  unavoidably  and  necessarily 
accrue,  it  is  gross  ignorance  to  claim  that  this  is  a  demo- 
cratic, or  republican,  government,  whatever  may  be  its 
form,  whatever  may  have  been  the  intention  of  the  found- 
ers, or  whoever  may  have  lived  and  died  in  the  belief  that 
it  was. 

It  has  always  been  an  Aristocracy  of  land  and  slaves, 
or  a  Plutocracy  of  money  and  industrial  slavery,  and 
shows  more  A'ivid  imprints  of  the  signs  that  portend  the 
end  of  such  governments  than  was  ever  seen  before. 

President  Lincoln  felt,  if  he  did  not  understand,  that 
"use-value''  and  the  j)0wer  of  tender  were  necessary  to 
bring  out  the  full  capacity  of  the  people,  and  that  an  ex- 
jiression  of  their  full  capacity  was  necessary  to  succeed. 

The  power  of  "Tender,"  applied  to  "use-value"  practices, 
wins  wars  when  nothing  else  will.  For  "tender"  unre- 
strictedly applied  to  '•use-value"  notes  is  the  guarantee  to 
labor  that  it  will  receive  all  it  produces,  and  under  such 


88  THE  EVOLUTIOy  OF  MOXEY. 

a  guarantee' there  is  no  limit  to  labor's  ingenuity  to  con- 
trol and  economize  the  forces  of  nature,  and  make  them 
serviceable  and  efficient,  or  destructive  in  carr^'ing  out 
its  purposes. 

The  assistance  received  from  "Tender"  and  "use-value" 
— though  rendered  in  subserviencv  to  gold  and  silver — 
v^as  what  saved  the  country,  as  was  adjudicated  by  the 
Supreme  Court  in  the  "Legal  Tender  Cases''  when  Justice 
Strong  said,  if  the  notes  had  not  been  given  the  tender 
that  was  given  them  there  might  have  been  no  court  to 
decide  whether  or  not  it  was  constitutional. 

The  war  was  waged  to  a  successful  termination  with 
the  aid  of  the  legal-tender,  or  ''use-value,"  government 
notes,  when  the  system  of  banking  that  Jackson  de- 
stroyed, was  reintroduced  in  a  modified  form.  Instead 
of  one  bank,  with  the  government  as  a  stockholder  and 
depositor,  the  law  provided  for  a  system  of  banks  char- 
tered by  Congress,  owned  by  private  capital,  and  subject 
to  governmental  sui)ervision  and  control. 

The  Money  Power  accumulated  such  an  abundance  of 
wealth  from  the  vicarious  sacrifices  of  the  people  during, 
and  in  the  conduct  of,  the  war,  that  it  induced  Congress 
to  give  it  the  more  concentrated  exercise  of  the  right  to 
issue  money,  by  the  elimination  of  the  use  of  state  bank- 
notes, by  the  elimination  of  the  use  of  silver,  and  by  the 
elimination  of  the  use  of  government  notes,  until  the 
finances  of  the  country  were  turned  over  to  the  owners 
of  gold  and  the  National  banks. 

The  state  bank-notes,  and  the  government  notes  sur- 
rendered the  value  of  their  use,  or  their  "use-value,"  to 
the  notes  of  the  National  banks,  as  fast  as  the  change 
from  the  use  of  the  two  to  the  use  of  the  one  could  be 
made.  This  shifting  of  "use-value''  was  sacrificial  to  the 
people,  but  beneficial  to  the  owners  of  the  gold  and  the 
National  banks;  and  their  fortunes  continued  to  increase 
as  the  change  was  made,  and  as  "use-value"  was  concen- 
trated in  their  possession. 


THE  EVOLlTIOy  OF  MOSEY.  89 

This  continued  until  1875,  and  tliougli  the  accumula- 
tions of  the  gold  owners  and  bankers  Avere  only  the  losses 
of  the  people,  the  people  could  not  stand  the  additional 
losses  imposed  by  the  Resumption  Act  of  1875. 

The  people  knew  that  a  change  was  going  on,  foi-  thev 
had  been  taught  that  their  losses  were  due  to  the  use  of 
state  bank-notes;  and  they  were  willing  that  the  notes 
should  be  deprived  of  their  '"use-value"  and  retired. 

They  had  been  taught  that  the  issue  of  notes  by  the 
government  was  unconstitutional ;  that  their  issue  was 
permissible  only  as  a  war  measure,  and  that  no  paper 
money  could  have  value  unless  it  was  based  upon  gold 
and  silver.  They  had  been  taught  that  it  was  folly  for 
the  Government  to  purchase  gold  and  silver  to  be  held 
idle  in  the  vaults,  as  a  base  for  the  support  of  the  use 
of  notes,  when  the  National  banks  would  issue  the  notes, 
and  they  were  willing  that  the  government  notes  should 
be  deprived  of  their  "use-value"  and  retired. 

The  people  were  under  the  impression  that  these 
changes  were  a  necessity  brought  on  by  the  war;  that 
their  losses  were  such  as  could  not  be  helped;  and  after 
the  changes  were  made  that  they  would  enjoy  the  use  of 
gold  and  silver,  as  their  use  was  enlarged  and  made 
more  expeditious  and  stable  by  "the  best  banking  system 
the  world  ever  saw  I"  So  thought  the  ixiople ;  but  not  so 
the  gold  owners.  The  Constitution  was  not  written,  nor 
has  it  been  construed,  to  be  binding  on  them.  It  is  only 
serviceable  when  needed  to  limit  the  exercise  of  powers 
that  would  injure  the  gold  owners  and  bankers. 

The  use  of  gold,  silver,  and  national  bank-notes  would 
have  operated  as  follows:  The  bank-notes  were  to  be 
issued  u])on  bonds,  and  some  of  the  bonds  were  payable 
in  lawful  money,  and  othei-s  in  coin. 

If  bank-notes  had  been  issued  on  bonds  payable  in  law- 
ful money,  they  would  virtually  have  been  issued  on  gov- 
ernment notes,  to  the  extent  tlie  notes  had  llie  right  to 
pay  the   bonds.     If   b;ink-ii()t(\s   liad   been    issued    on    the 


90  THE  EVOLUTION  OF  MOXEY. 

bonds  payable  in  legal-tender  government  notes — inasmuch 
as  the  only  value  of  the  government  notes  was  in  their 
use — the  government  would  have  been  in  the  absurd  atti- 
tude of  authorizing  banks  to  issue  "use-value"  money  upon 
its  "use-value"'  notes. 

The  contention  that  paper  money  must  be  based  upon 
silver  and  gold  to  be  serviceable  and,  therefore,  valuable, 
had  been  ignored  in  the  practices  of  the  people;  but  it 
would  not  do  for  the  Government  to  act  upon  that 
assumption,  for  it  would  then  be  compelled  to  realize  that 
the  issue  of  money  was  the  exercise  of  a  sovereign  power, 
and  not  a  private  right. 

Here  may  be  found  the  reason  for  the  change  in  the  law 
that  all  the  bonds  should  be  payable  in  coin. 

That  law  preserved  the  myth  that  all  paper  money,  or, 
more  accurately  stated  the  use  of  all  paper  money,  must 
be  based  upon  gold  and  silver  to  make  it  valuable. 

This  change  from  the  use  of  gold  and  silver  to  the  use 
of  bonds,  as  a  base  for  the  issue  of  bank-notes,  was  com- 
pulsory, as  was  the  change  from  the  use  of  gold  and  silver 
to  the  use  of  bank-credits  and  bank-notes  to  conduct  busi- 
ness. Gold  and  silver  lost  value,  when  they  were  forced 
to  surrender  to  bonds  the  right  to  be  used  as  supporters 
of  bank-notes,  just  as  they  did  when  they  were  compelled 
to  share  with  bank-credits  and  bank-notes  the  exclusive 
right  to  be  used  as  money. 

In  the  first  instance  they  apparently  recovered  the  lost 
value  of  this  lost  use,  when  they  were  given  the  quality 
of  Tender — but  governmental  power  can  do  more  for  the 
two — and  if  their  claimed  intrinsic-value  is  to  be  retained, 
one  must  give  way  to  the  other;  for  the  use  of  the  inter- 
est-hearing hond — as  a  dase  for  the  issue  of  notes — is  not 
going  to  he  surrendered  to  either,  so  long  as  wars  can 
cause  honds  to  he  issued. 

Europe  had  eliminated  the  use  of  silver  as  a  supporter 
of  the  value  of  paper  money.  This  country  had  to  do  one 
of  three  things  :    Eliminate  the  use  of  silver ;  continue  the 


THE  EVOLUTIOX  OF  MONEY.  91 

use  of  both  metals;  or  assert  its  sovereijin  power,  and  issue 
legal -tender  paper  money  as  the  official  representatives  of 
the  "Words  of  the  Money  of  Account."' 

The  Constitution  had  to  be  changed  before  this  country 
could  agree  with  Enrope  and  eliminate  the  nse  of  silver. 

There  was  no  hope  of  inducing  the  people  to  eliminate 
the  use  of  silver;  and  if  the  scientific  necessity  for  doing 
so  had  been  seen  and  pointed  out,  it  might  have  caused 
the  realization  that  the  issue  of  money  was  the  exercise 
of  sovereign  power,  and  the  use  of  gold  might  also  have 
been  eliminated. 

The  Money  Power  of  Europe  and  this  country  may  not 
have  scientifically  understood  the  situation.  If  they  did, 
they  never  disclosed  it;  but  both  felt  there  was  danger — 
if  not  disaster — to  their  interests,  if  the  people  of  this 
country  should  be  left  in  the  enjoyment  of  such  use  as 
they  could  make  of  gold,  government  notes,  state  bank- 
notes, and  silver,  especially  after  Europe  had  ceased  the 
use  of  silver. 

The  Money  Power  would  have  lost  control  over  the 
issue  of  money,  instead  of  securing  the  absolute  monopoly 
that  is  necessary  to  its  interest;  and  this  fact  was  the 
cause  of  the  eff'orts  made  to  get  the  bonds  paid  in  coin; 
the  state  bank  and  government  notes  retired,  and  the  law 
passed  giving  them  the  National  banking  system. 

Moved  by  this  danger  to  their  interests,  and  incited  by 
the  Money  Power  of  Europe,  Congress  was  induced  to 
take  the  action — previous  to  1875 — which  drove  the  state 
bank-notes  from  circulation;  made  the  bonds  and  interest 
]jayable  in  coin;  the  dues  on  im])orts  payable  in  gold;  the 
retirement  of  all  government  notes,  and  what  should  be 
used  as  money,  certain  and  final. 

What  should  be  used  as  money  was  set  forth  in  the 
Kesumption  Act  of  1875.  The  peoi)le  suj^posed  that  act 
I>rovided  for  the  use  of  gold,  silver,  and  as  many  notes  of 
the  National  banks  as  Congress  in  its  wisdom  had  deemed 


92  THE  EVOLUTION  OF  MOXEY. 

necessary  for  their  interests,  and  they  began  to  fit  their 
necks  to  the  financial  yoke. 

When  the  people  were  informed  that  their  right  to  use 
silver  had  been  previously,  in  1873  and  1S74,  taken  away, 
and  that  the  money  of  the  country — after  the  period  des- 
ignated in  the  act — would  be  limited  to  the  use  of  gold 
and  the  national  bank-notes — pandemonium  broke  loose. 

The  panic  that  ensued  was  worse  than  that  of  1837, 
when  Jackson  drove  the  use  of  things  that  served  the 
functions  of  mone}'  to  a  compliance  with  the  barbarism 
of  the  Constitution,  for  the  Eesumption  Act  restricted 
the  use  of  things  that  served  the  function  of  money  to 
gold,  and  such  notes  as  the  owners  of  gold  might  deem 
it  to  be  to  their  interest  to  put  into  circulation. 

All  ideas  of  value  disap})eared,  and  after  the  general 
demand  that  all  the  obligations  of  the  people  should  be 
paid  in  money — an  impossibility — the  property  of  the 
many  was  transferred  to  the  few  by  wholesale. 

Transportation,  and  other  proj^erties  of  inestimable 
value,  were  gathered  in  by  the  few  at  their  own  price 
until  there  was  a  concentration  of  wealth,  and  i)ossibili- 
ties  of  wealth,  undreamed  of  up  to  that  time ;  and  many 
of  the  fabulous  fortunes  of  today  had  their  origin  in  that 
panic,  and  all  are  indebted  to  the  subsequent  enforcement 
of  policies  similar  to  those  tliat  caused  the  i)anic. 

It  has  never  been  understood  how  Congress — l)v  a 
fraudulent  codification  of  an  act — could  legally  take 
from  the  people,  and  the  owners  of  silver,  their  constitu- 
tionally-secured right  to  use  the  metal  as  money. 

The  matter  seems  to  have  been  accepted  as  one  of  the 
many  tricks  that  the  Money  PoAver  plays  u]>on  the  rep- 
resentatives of  the  people,  when  constitutional  guaranties 
bar  its  effort  to  increase  its  wealth. 

The  suffering  and  loss  of  the  panic  was  so  terrible  that 
the  Congress  of  1878,  in  response  to  the  demands  of  the 
people,  stopped  the  retirement  and  cancellation  of  the 
government   notes   bv   an   act   which    ordered   that   thev 


THE  ETOLUTIOy  OF  MOXEY.  93 

should  be  reissued  as  often  as  received  into  the  treasury. 
This  Congress,  under  the  pressure  of  tlie  same  intlueuce, 
restored  to  the  people  the  right  to  a  partial  use  of  silver, 
by  the  act  which  authorized  the  purchase  of  a  certain 
amount  each  month. 

This  silver  was  made  tender  in  payment  of  debt,  which 
gave  it  a  value  in  its  use  equal  to  the  value  of  the  use  of 
gold.  The  situation  was  therefore  relieved  to  the  extent 
of  the  Mi]  millions  of  "use-value"  government  notes  that 
were  left  in  circulation,  for  they  also  were  tenders  in  pay 
ment  of  debt;  and  it  was  further  relieved  as  silver  was 
purchased,  and  the  coins,  or  paper  certificates,  were 
l)laced  in  circulation.  Though  silver  was  supposed  to  be 
in  part  restored  to  its  constitutional  right,  such  was  not 
the  case,  for  the  representatives  of  the  people  had  been 
tricked  again  by  the  Money  Power. 

When  silver  was  demonetized,  it  was  the  legal  valuator 
(at  416i/4  grains)  of  the  "word,"  dollar,  the  Unit  of  the 
Money  of  Account;  and  at  that  valuation  it  had  "use- 
value"'  secured  by  full  tender.  Gold  at  16  to  1  had  been 
given  equal  "use-value,"  which  had  been  secured  by  giving 
it  full  tender,  but  it  was  not  the  legal  valuator  of  the 
"word,"  dollar. 

Since,  in  the  science  of  finance  and  the  practices  of  the 
people,  it  is  use,  and  not  intrinsic  worth,  that  determines 
the  value  of  gold  and  silver,  it  was  now  necessary  to  make 
gold  the  legal  valuator  of  the  "word,"  dollar,  if  the  intrin- 
sic-value system  was  to  lie  maintaiued,  aud  25  8-10  grains 
of  gold  was  given  that  distinction.  When  silver  was  re- 
monetized — though  it  Avas  given  legal  teuder — it  was  not 
reinstated,  as  it  should  have  been,  as  a  legal  valuator,  at 
•ilGi^  grains. 

This  7)laced  both  the  Government  and  silver  in  an 
awkward  ])redicament.  Silver  was  given  the  right  to 
"use-value,"  by  the  ])ower  of  tender — but  it  was  not  re- 
instated to  its  original  right  as  a  legal  valuator  of  tho 
"word,"  dollar,  and  this  gave  the  owners  of  gold  the  ex- 


94  'J^'HE  EVOLUTION  OF  MOSEY. 

ciise  for  claiming  tliat  the  value  of  the  s^ilver  dollar  was 
not  equal  to  the  value  of  the  gold  dollar. 

It  was  therefore  contended  that  though  the  Govern- 
ment had  adopted  the  gold  standard,  it  was  compelling 
the  people  to  accept  silver  as  a  standard  of  payment ;  and 
to  the  extent  that  silver  liquidated  debt,  beyond  its  so- 
called  intrinsic  value,  it  Avas  claimed  that  it  was  govern- 
mental fiat,  *.  €.,  financial  theft. 

The  Government  was  in  a  still  more  awkward  predica- 
ment with  its  own  notes.  It  had  issued  them  as  a  debt 
jjayable  in  lawful  money,  when  both  gold  and  silver  were 
lawful  money.  It  had,  by  giving  the  notes  limited  legal 
tender,  endowed  them  with  ^'use-value"  for  all  purposes, 
except  the  payment  of  the  interest  on  its  bonds,  and  the 
import  dues. 

It  had  undertaken  the  payment  and  retirement  of  its 
notes,  as  was  supposed,  by  the  use  of  both  gold  and  silver, 
when  it  was  claimed  that  it  could  not  use  silver,  because 
that  metal  was  not  a  legal  valuator;  and  it  was  evident — 
if  the  notes  were  retired  by  the  use  of  gold  only — it  would 
end  in  the  legal  transfer  of  the  resources  of  both  the  gov- 
ernment and  the  people  to  the  owners  of  gold. 

The  people  would  not  permit  that  then,  however  willing 
their  officials,  and  the  leaders  of  the  factions,  may  have 
been;  and  they  will  not  j)ermit  it  to  be  much  longer 
continued,  however  far  it  may  have  been  treacherously 
carried. 

Being  in  this  awkward  predicament,  the  Government, 
through  the  influence  of  the  Money  Power  over  its  offi- 
cials or  because  of  their  ignorance  of  the  science  of 
finance,  has  been  harried  with  the  demand  that  it  make 
its  fiat  money,  as  it  is  called,  as  good  as  their  gold :  and 
leaders  of  factions  have  viciously  fought  to  induce  the 
people  to  elect  them  to  office,  that  they  might  carry  out 
this  mandate  of  the  gold  owners. 

No  one  has  been  elected  President,  whether  democrat 
or  republican,  that  the  gold  owners  did   not  think,   or 


THE  EVOLUTIOX  OF  MOyEY.  95 

hope,  would  act  in  their  interest;  and  they  must  have 
hiughed  as  thev  saw  how  flercely  ignorance  and  cor- 
ruption were  willing  to  fight  for  the  loot  they  were 
anxious  to  pay  for  the  faithful  service  of  exercising  the 
dominant  Sovereign  Poicer  of  the  government,  as  their 
private  right. 

The  naked,  or  serviceable,  use  of  34G  millions  of  green- 
backs, and  the  use  of  silver — as  it  was  placed  in  circula- 
tion— deprived  the  gold  owners  of  that  much  use  of  their 
bank-notes;  and  to  the  extent  they  lost  this  use,  they  lost 
the  value  of  that  service  which  they  claimed  as  their 
constitutional  right — forgetful  that  the  right  of  the  own- 
ers of  silver  to  this  value  was  once  as  sacred  as  theirs. 

The  naked  use  of  the  "Greenbacks,"  and  the  use  of 
silver,  was  not  only  depriving  the  bankers  of  the  value 
of  the  use,  or  the  "use-value,"  of  their  bank-notes,  but  the 
use  of  the  two,  and  the  use  that  the  people  Avas  nuiking 
of  the  national  bank-notes  was  fast  enabling  the  people 
to  pay  the  bonds.  This  was  destroying  the  scheme  of  the 
"best  banking  system  the  world  ever  saw;"  and  the  gold 
owners  became  desperate.  They  had  not  been  idle,  how- 
ever. When  the  Congress  of  1878  partially  rehabilitated 
silver,  they  waged  war  upon  the  "Greenbacks." 

Though  the  "Greenbacks" — when  issued — may  have  had 
the  right  to  tender,  and  by  reason  of  that  right  could  be 
used  to  pay  debts  contracted  after  they  had  been  issued — 
as  had  been  decided  by  the  Su])reme  Court —  it  was  con- 
tended tliat  they  could  not  be  used  to  pay  debts  con- 
tracted before  they  were  issued.  This  gave  an  excuse  to 
reopen  the  whole  question  of  "Tender,"  and  cases  on  the 
docket  were  taken  advantage  of  to  have  the  Supreme  Court 
decide  whether  Congress  had  the  power  to  issue  notes,  and 
make  them  tenders. 

Though  the  Court  decided  in  the  Legal  Tender  Cases 
that  Congress  had  the  power  to  issue  notes,  and  make 
them  a  tender;  though  it  held  tliat  the  value  of  the  use 
of  the  notes,  or  their  "use-valiu',"'  was  separate'  and  iiid;'- 


96  THE  EVOLLTIOy  OF  MOyEY. 

pendent  of  intrinsic-value;  tliougli  it  held  that  Congress 
could  utilize  "use-value"  by  making  the  notes  of  the  gov- 
ernment full  tenders;  and  though  its  reasoning  intimated 
that  the  issue  of  money  was  the  exercise  of  a  sovereign 
power,  it  was  content  to  Anally  hold,  though  Congress 
could  issue  notes  and  make  them  valuable  in  use,  it  could 
not  create  value,  and,  therefore,  the  notes,  while  entitled 
to  "use-value"  for  a  time,  were  a  debt  of  the  government 
that  must  eventually  be  paid  in  gold.  The  Supreme  Court, 
therefore,  in  eflect,  decided  that  M-hile  Congress  had  the 
power  to  create  "use-value,"  and  let  it  serve  the  people 
indefinitely,  it  also  held  that  the  "use-value"  of  the  notes 
was  dependent  upon  their  redemption  in  gold. 

This  phase  of  the  decision  must  have  been  taken  advan- 
tage of  to  legalize  the  "Gold  Keserve;"  but  its  origin  had 
not  waited  for  the  decision,  for  a  Secretary  of  the  Treas- 
ury had  been  induced  to  assume  that  the  use  of  the 
"Greenbacks"  had  no  value,  unless  they  were  based  upon 
gold.  Therefore,  in  order  that  the  "Greenbacks"  might 
have  "use-value,"  and  justify  the  government's  conduct  in 
leaving  them  in  circulation,  a  large  amount  of  gold  was 
bought  and  held  in  idlenass  in  the  vaults  for  the  purpose 
of  supi)()rting  their  "use-value."  This  furnished  a  market 
for  the  gold,  and  when  it  could  not  be  more  advanta- 
geously used  by  the  financiers,  the  government  was  im- 
posed with  the  burden  of  carrying  it. 

The  profits  that  could  be  made  out  of  this  now  legal- 
ized "Gold  Reserve"  were  not  duly  appreciated;  and  the 
gold  owners  and  bankers  unwittingly  made  a  move  that, 
in  its  legal  result,  should  have  destroyed  their  claimed 
right  to  a  Gold  Reserve  Fund. 

The  service  that  the  use  of  the  "Greenbacks,"  and  the 
use  of  the  increasing  silver,  was  rendering  the  people — 
in  addition  to  paying  the  public  debt — kept  their  property 
and  the  fruit  of  their  labor — to  a  great  extent — out  of 
the  possession  of  the  gold  owners  and  the  bankers. 

The  protective  use  of  the  "Greenbacks"  to  the  people, 


THE  EVOLUTION  OF  MONEY.  97 

and  their  detrimental  use  to  the  interest  of  the  gold  own- 
ers and  the  banks,  was  resented,  and  it  was  decided  to 
make  another  effort  to  drive  them  out  of  circulation. 

It  was,  therefore,  contended — though  Congress  might 
have  the  power  to  issue  notes  and  make  them  a  legal- 
tender — that  the  tender  was  lost  when  they  were  paid 
into  the  treasury ;  and  it  was  further  contended  that  when 
they  were  reissued  under  the  law  of  1878,  they  did  not 
have  the  right  to  the  "use-value"  which  the  power  of  legal 
tender  gives  them. 

A  case  was  made  and  carried  to  the  Supreme  Court 
for  adjudication,  and  ^\iien  it  decided  that  Congress  had 
as  sovereign  a  poAver  to  make  money  as  other  nations, 
and  as  much  right  and  power  to  make  paper  notes,  money, 
by  giving  them  full  tender,  as  it  had  to  make  gold,  money, 
by  giving  it  full  tender,  it  was  at  last  officially  admitted 
that  the  issue  of  money  was  the  exercise  of  a  sovereign 
power — not  a  private  right;  and,  therefore,  there  was  no 
longer  any  reason  in  law,  or  in  practice,  for  a  Gold 
Keserve  to  ensure  the  ''use-value"  of  the  "Greenbacks," 

The  Supreme  Court,  in  Juillard  vs.  Greenman,  110  U. 
S.  Kep.,  421,  virtually  decided  that  the  issue  of  government 
notes,  impressed  with  the  full  tender  power,  made  them 
the  official  representatives  of  the  "words,"  dollars,  dimes, 
cents  and  mills  which  compose  our  "Money  of  Account ;" 
and  since  those  "words"  are  only  used  to  express  the  unit 
of  labor,  its  subdivisions  and  multiples;  and  since  the 
scientific  expression  of  use,  or  lahor  value,  is  the  legal  ten- 
der notes — and  not  gold  coins — and  since  their  only  value 
is,  and  must  be,  in  their  use,  the  only  value  that  should  be 
known  to  the  law  is  the  "use-value"  of  the  notes  of  the 
government. 

The  value  of  labor,  therefore,  when  officially  recognized, 
and  exjiressed  in  full  legal-tender  government  notes,  is 
the  equitable,  and  scientific,  standard  of  measure;  meets 


98  THE  EVOLUTION  OF  MONEY. 

the  theories  of  Sir  James  Stewart ;  the  teachings  of  Adam 
Smith;  explains  the  advantage  of  the  practices  of  the 
Banli  of  Venice  and  all  other  banks,  and  is  the  only 
method  which  will  protect  the  people  from  the  spoliation 
of  class  nnder  the  intrinsic-value  svstem. 


CHAPTER   VIII. 


HE  Supreme  Court  of  the  United  States  finally 
decided  that  the  issue  of  money  is  the  exercise 
of  a  sovereign  power — not  the  exercise  of  a 
private  right,  as  was  erroneously  supposed  by  the  framers 
of  the  Constitution. 

This  decision  followed,  logical!}'  and  scientifically,  the 
action  of  Congress,  which  deprij-ed  4161/4  grains  of  silver 
of  the  right  to  be  used  as  the  legal  valuator  of  the  "word," 
dollar,  and  therefore  of  its  constitutional  right  to  be  iLsed 
as  a  standard  of  jjayment. 

Silver  was  eliminated  because  it  and  gold,  after  they 
surrendered  to  bonds  the  service  of  supporting  bank- 
notes, had  lost  so  much  value — in  the  loss  of  that  service 
— that  even  when  impressed  with  the  full  tender  power, 
their  intrinsic  worth — as  it  was  called — could  not  be  held 
up  to  their  legally  assigned  value;  and  it  worked  injustice 
to  compel  the  creditors  to  accept  them  as  standards  of 
I)ayment.  Therefore  it  was  assumed — since  the  service 
left  to  be  performed  was  so  small,  that  the  use  of  the  two 
metals  cheapened  tlie  value  of  the  service  of  both,  until 
their  joint  use  worked  an  injustice  to  the  creditors — that 
it  would  be  better  to  cease  the  use  of  one,  and,  thereby, 
maintain — not  the  use,  or  money — but  the  claimed  intrin- 
sic value — of  the  other. 

The  error  lies  in  the  assumption  that  the  elimination 
of  the  use  of  one  of  the  metals  tends  to  maintain  only 
the  intrinsic-value  of  the  other. 

The  intrinsic,  oi-  inherent,  value  of  gold  and  silver  coins 
is  the  value  of  the  use  that  can  be  made  of  them,  as  com- 
modities, and  has  notliing  to  do  with  the  use,  i.  e.,  service, 
that  is  made  of  them  as  money.  Their  use,  as  commod- 
ities, is  so  different  and  so  separate  from  their  use,  as 


100-  ^'^^^  EVOLUTIoy  OF  MO^EY. 

money,  and  the  fact  that,  as  commodities,  they  are  so 
cumbrous  it  unfits  them  for  the  performance  of 
the  money  service,  has  caused  the  use  of  one  to  be  dis- 
carded in  the  hope  that  the  use — not  the  intrinsic — value 
of  the  other  could  be  maintained;  but  notwithstanding 
gold  was  left  in  the  exclusive  right  to  the  use,  /.  e.^  service, 
and  given  the  legal-tender  power  to  enforce  the  right,  the 
necessity  for  expeditiousness  and  efficiency  in  effecting 
exchanges  has,  in  practice,  compelled  it  to  surrender  the 
performance  of  the  service  to  government  notes,  bank- 
notes, and  the  credits  of  the  people. 

What  are  the  uses,  i.  e.,  services,  now  made  of  gold 
which  support  its  value — as  money — since  it  is  use,  I.  e., 
service,  as  money,  and  not  use — as  a  couiniodity^thiit 
gives  it  the  value  which  makes  it  the  standard  of  value? 

Gold  long  since  began  to  lose  its  value,  as  money,  when 
it  and  silver  surrendered  at  first  to  bank-credits,  and 
then  to  bank-notes,  their  use,  /.  e.,  right  to  serve,  as  actual 
current  money.  It  and  silver  lost  so  much  value  when 
they  had  to  give  up  this  service  that  they  would  have 
ceased  to  be  used,  or  considered  as  money,  if  they  had  not 
been  given  that  power  Avhicli  compelled  everyone  to  accept 
them,  at  an  assigned  valuation,  in  the  payment  of  debt, 
i.  c,  the  1)0 wer  of  Tender. 

They  enjoyed  the  value  of  the  service  that  legal  tender 
exacts,  until  they  were  available  (mly  in  the  retail  trade, 
in  the  settlement  of  balances  in  the  wholesale  trade,  and 
for  the  support  of  bank-notes — all  of  which  services  did 
not  conduct  more  than  five  per  cent  of  the  volume  of  busi- 
ness, at  the  time  Sir  James  Stewart  wrote. 

They  inefficiently  performed  these  services,  or  served 
these  uses,  until  they  had  to  give  up  to  bonds  the  service 
of  supporting  bank-notes.  This  restricted  their  use  to  the 
retail  trade,  and  the  settlement  of  balances,  when  they 
became  so  plentiful  that  the  power  of  legal-tender  would 
not  preserve  their  assigned  value,  and  the  use  of  one  had 
to  be  eliminated.    Even  after  the  elimination  of  silver,  the 


THE  EVOLUTION  OF  MOSEY.  IQl 

use  of  gold  was  curtailed  until  it  did  not  conduct  3  per 
cent  of  the  volume  of  business ;  and  in  New  York  City,  it 
is  claimed,  gold  is  not  now  used  in  the  conduct  of  one-half 
of  one  per  cent  of  the  volume. 

•  Gold  is  not  used  to  support  bank-notes,  for  the.v  are 
issued  on  bonds.  It  is  not  exclusively  used  as  bank- 
reserves,  for  silver  and  credit  currency  may  be,  and  are, 
so  used.  It  is  not  used  in  the  conduct  of  the  retail  trade, 
for  rliat  is  conducted  by  subsidiary  silver  currency,  credit 
currenc}'  and  bank  checks.  It  is  not  used  in  the  settle- 
ment of  balances,  for  they  are  settled  by  credit  currency, 
silver  currency,  and  bauk  checks.  It  is  no  longer  exclu- 
sively used  to  pay  import  dues  and  the  interest  on  the 
government  debt,  for  in  practice,  they  are  in  great  part 
paid  by  credit  currency,  silver  currency,  and  bank  checks. 

In  fact,  gold  no  longer  has  any  practical  use,  as  money, 
and  since  its  value,  as  money,  depends  on  its  service,  as 
money,  it  practical ij  has  no  value,  as  money :  and  its  only 
value  would  be  its  use  as  a  commodity,  did  not  the  Gov- 
ernment give  its  owners  the  right  and  power  to  demand 
that  the  obligations  of  the  people,  the  government  notes, 
the  silver  coins,  the  silver-certificates,  and  the  bank-notes 
must  all  be  paid  with  gold  coins,  whenever  they  deem  it  to 
be  to  their  interest  to  make  the  demand. 

It  is  this  power,  and  the  ever-present  fear  that  it  will 
be  exercised  by  a  few  malefactors — irho  have  a  corner  on 
its  exercise — that  is  the  cause  of  the  undue  value  of  gold. 

This  is  a  concentration  in  the  hands  of  a  few  of  the 
right  to  exercfse,  and  mani])ulate,  as  a  private  privilege 
the  sovereign  ]jower  to  issue  money,  after  it  has  been  offi- 
cially declared  that  it  is  the  exercise  of  a  sovereign  jtower. 

It  is  the  exercise  of  a  sovereign  power  that  nuikes  the 
foulest  of  plutocracies  when  exercised  as  a  private  graft, 
as  is  already  indicated,  and  the  i)ower  has  not  borne  full 
fruitage. 

If  it  is  the  exercise  of  a  sovereign  power,  why  does  not 
Congrass  exercise  it  as  such  a  power  should  be  exercised. 


102  'iHE  EVOLUTION  OF  MONEY. 

iu  the  equal  interest  of  all  the  people  iu  fact  as  well  as 
in  theory? 

This  power,  coming  down  through  the  centuries 
chained  to  gold  and  silver,  has  so  long  and  so  dominantly 
been  exercised  as  a  private  right,  that  the  statesmen,  the 
economists,  the  scientists,  the  corporate  church,  and  even 
the  victims  themselves  have  feared  to  contend  that  it 
should  be  exercised  as  a  sovereign  power,  for  such  conten- 
tion is  stigmatized  as  treason  to  the  government,  error  in 
political  economy,  vagaries  of  the  scientists,  heresy  in  the 
church,  and  crankiness  in  the  deluded  victims. 

statesmen,  therefore,  who  are  chosen  to  exercise  the 
sovereign  powers  of  the  people,  have  been  easily  induced 
to  believe  that  the  Supreme  Court's  decision,  viz :  that  it 
was  the  exercise  of  a  sovereign  power,  may  be  true  in 
theory,  but  too  dangerous  in  practice  to  be  entrusted  to 
any  such  aggregation  of  men  as  w^ere  ever  selected  to  ex- 
ercise sovereign  .powers. 

The  statesman  concedes  it  is  a  private  right,  and,  with 
apologies  for  the  decision,  refuses  to  exercise  the  sover- 
eign power,  but  acts  in  obedience  to  the  instructions  of 
the  financiers. 

The  economist  has  delved  among  the  practices  of  the 
people  for  the  truth  as  to  the  nature  and  causes  of  wealth 
that  he  might  propose  principles  which,  when  made  rules 
of  action  to  govern  their  practices,  would  stop  injustice, 
but  fetish  worship  of  the  metals  has  blinded  his  vision. 

The  scientist  set  forth  the  true  theory  for  the  issue  of 
money,  and  left  it  to  statesmen  to  adopt  it  in  the  policies 
of  governments.  Corporate  church — not  religion — has 
ever  been  the  hand-maiden  of  gold,  and  sets  its  seal  of  dis- 
approval upon  all  who  hold  that  the  issue  of  money  is  the 
exercise  of  a  sovereign  power,  because  it  is  an  attack  on 
the  gold  standard.  Therefore,  the  principle  enunciated  by 
the  Supreme  Court  of  the  United  States  in  Juillard  vs. 
Greenmau.  viz:  that  the  issue  of  money  was  the  exercise 
of  a  sovereign  power,  has  not  been  accepted. 


THE  EVOLUTION  JJF  MONEY.  103 

The  Mouey  Power  had  a  few  of  its  ablest  industrial 
slaves  to  contend  that  the  court  was  in  error;  and  as,  at 
that  time,  it  had  under  its  control  the  leaders  of  both  the 
Kepublicau  and  Democratic  factions,  no  acceptance  was 
given  the  decision  except  by  the  few  who  organized  and 
made  a  canvass  for  the  control  of  the  government  under 
the  leadership  of  the  Hon.  Peter  Cooper,  and  the  name  of 
the  "Greenback  Party.'' 

That  party  was  so  easily  ridiculed  to  death  by  the  com- 
bined jeers  of  the  two  factions,  that  all  consideration  of 
the  decision  was  dropped;  and  the  determination  of  the 
gold  owners  that  their  exclusive  right  to  the  benefits  that 
accrue  from  the  exercise  of  the  sovereign  power  to  issue 
money  should  not  be  disturbed,  made  them  more  insolent, 
and  more  domiuantly  corrupt  than  before  the  decision. 

The  Kepublicau  party  was  fairly  respectable  at  that 
time.  It  had  its  good  traits  as  well  as  factional  weak- 
nesses. It  had  taken  control  of  the  government  and 
brought  on  the  war.  Its  purpose  was  to  relieve  the 
country  from  the  evils  of  a  land  and  slave  aristocracy. 
It  had  no  idea  that  it  was  being  used  to  take  the  govern- 
ment from  the  Southern  aristocracy  of  land  and  slaves 
to  turn  it  over  to  an  Eastern  and  Northern  plutocracy  of 
money  and  industrial  slavery. 

It  had  no  appreciation  of  the  fact  that  the  issue  of 
money  was  the  exercise  of  a  sovereign  power;  and  that 
the  supremacy  of  the  Southern  aristocracy  had  been  due 
to  the  service  of  the  slaves  and  the  use,  i.  e.,  service,  of  the 
notes  of  state  banks ;  and  that  this,  supremacy  Avas  more 
and  more  disputed,  as  money  accumulated  in  the  East 
and  realized  its  inability  to  make  industrial  laboi-  i)rofit- 
ably  compete  with  slave  labor. 

The  Hon.  Thad.  Stevens,  in  his  admission,  discloses 
that  he  had  no  appreciation  of  the  fact  that  the  issue  of 
money  was  the  exercise  of  a  sovereign  i)0Aver,  for  if  he 
had  been  so  convinced,  he  would  have  filled  the  i)risons  at 
AVashington  with  the  bankers  Avhen  they  came  there  to  in- 


104  THE  EVOLUTION  OF  MONEY. 

timidate  Congreiss  into  imposing  vicarious  suffering  upon 
patriotism  for  their  profit. 

President  Lincoln  did  not  realize  that  the  issue  of 
money  was  a  sovereign  power,  when  he  was  urging  Con- 
gress to  issue  "Demand-notes"  instead  of  bonds  so  thai 
he  could  quickly  command  the  resources  of  his  people, 
and  overwhelm  the  enemy  before  they  could  prepare  for 
resistance. 

He  felt  that  the  Government  should  exercise  the  right, 
and  when  he  was  compelled  to  respect  the  demands  of  the 
bankers,  and  his  prescience  could  see  the  distress  their 
manipulative  oppression  would  cause,  he  gave  utterance 
to  that  historic  plaint  of  his  forebodings  of  the  evils 
which  would  be  visited  upon  the  people. 

The  Republican  party,  therefore,  while  not  antagonistic 
to  the  Money  Power,  favored  other  interests.  Its  favorites 
were  the  beneficiaries  of  the  tariff.  It  based  its  hope  to 
continued  control  of  the  government  upon  the  assistance 
of  the  tariff'  beneficiaries.  It  taught  labor  to  believe  that 
it  favored  the  manufacturers  solely  in  order  that  they 
might  be  able  to  pay  the  laborers  higher  wages. 

The  manufacturers  and  the  industrial  slaves  kept  the 
party  in  power,  for  the  Money  Power  was  satisfied  with 
the  consideration  it  was  receiving,  and  most  of  them  sup- 
ported it  also.  But  there  came  a  time  when  the  interests 
of  the  tariff"  beneficiaries  and  the  interests  of  the  Money 
Power  conflicted. 

The  effort  to  protect  the  manufacturers,  and  their  in- 
dustrial slaves,  with  a  tariff'  bore  so  heavily  upon  all 
other  classes,  that  the  treasury  was  kept  filled  with 
money  over  and  above  the  amount  required  to  pay  ex- 
penses, and  meet  the  requirements  of  the  sinking  fund 
for  the  payment  of  bonds. 

The  Money  Power  did  not  want  the  surplus  used  to  pay 
the  bonds,  but  the  remnant  of  original  honesty  in  the 
Eepublican  party  did  not  know  anything,  except  to  use 
the  surplus  to  pay  the  bonded  debt. 


THE  EVOLUTION  OF  MONEY.  105 

It  became  necessary,  then,  for  the  Money  Power  to  pro- 
tect its  interests  against  the  use  of  this  surplus  money 
which  the  tariff  was  producing,  and  its  leaders  unad- 
visedly, if  not  thoughtlessly,  turned  to  the  Democratic 
party  and  assisted  in  the  election  of  Samuel  J.  Tilden 
President. 

The  Eepublican  party  acceded  to  the  demands  of  the 
bankers  during  the  war,  because  they  were  apparently 
supported  by  the  Constitution ;  and  it  did  not  know  what 
else  to  do  but  respect  the  provisions  of  that  instrument, 
even  though  it  worked  injustice. 

But  this  act  of  treachery — turning  the  control  of  the 
government  over  to  the  Democratic  party,  dominated 
as  it  was  by  the  leaders  of  the  Southern  ariiStocracy — was 
more  than  patriotic  intelligence  could  stand;  and  it  de- 
cided that  party  should  not  take  charge  of  the  govern- 
ment. 

The  Money  Power  sneaked  back  into  the  Kepul)lican 
party,  though  it  continued  its  favoritism  to  the  manufac- 
turers and  though  the  surplus  was  used  to  pay  bonds 
until  President  Arthur  stated  that  all  would  be  paid  be- 
fore they  matured.  Its  leaders  did  not  see  the  real  effects 
of  the  tariff.  They  fatuously  believed  that  in  its  gtMieral 
results  it  was  beneficial,  though  it  bore  hard  upon  many; 
claiming  that  it  enriched  the  country,  enlarged  its  capacity 
to  supply  its  own  wants;  made  it  independent  of  other 
nations  for  the  sustenance  of  its  people;  improved  its  in- 
dustrial laborers  by  paying  them  better  wages  than  wore 
paid  elsewhere;  and  that  the  country  would,  therefore, 
be  the  better  able  to  defend  itself  in  the  event  of  war.  But 
it  ignored  the  fact  that  the  tariff  was  not  judiciously 
levied,  and,  ais  a  consequence,  the  members  of  the  class, 
known  as  the  Money  Power,  had  increased  their  wealtli. 

The  manufacturers  were  enabled  to  make  so  much 
money  that  they  were  necessarily  impelled  to  change  I'l-oin 
the  tariff  to  the  money  class,  to  ])rotect  and  jn'cscrvc  their 
wealth.    As  the  money  class  has  been  enlarged  by  recruits 


106  '^'^^  EVOLUTION  OP  MONEY. 

from  the  tariff,  and  the  other  classes,  it  has  grown  in 
strength  until  it  is  all-powerful. 

This  enlargement  of  the  money  class  had  not  attained 
the  proportions  of  today,  but  it  had  received  sufficient 
accessions  to  encourage  it  to  make  another  effort  to  pro- 
tect its  banking  system;  and  since  it  could  not  get  the 
Eepublican  party  to  reduce  the  tariff,  to  cease  the  pur- 
chase of  silver,  or  to  retire  the  "Greenbacks" — pol- 
icies that  were  operating  to  pny  the  bonds,  and  otherwise 
injure  their  interests — they  turned  to  the  Democratic 
party  for  assistance,  and  elected  Grover  Cleveland  Presi- 
dent. He  did  all  he  could  when  he  ordered  his  Secretary 
of  the  Treasury  to  buy  only  the  minimum,  not  the  maxi- 
mum, amount  of  silver  each  month. 

The  surplus  accumulated,  and,  however  averse  the 
Money  Power  was  to  its  being  used  to  purchase  bonds, 
some  of  it  Avas  so  used  to  get  the  money  back  in  circula- 
tion. This,  and  the  inability  of  the  leaders  of  the  party  to 
do  for  the  Money  Power  what  they  wanted  done,  induced 
it  to  assist  the  Republicans  to  elect  Benjamin  Harrison 
President. 

He  was  a  disappointment  to  the  Money  Power,  for  he 
not  only  used  the  surplus  to  pay  the  bonds,  but  he  so  used 
all  of  it,  and  did  not  leave  a  part  of  it  on  deposit  in  the 
banks,  as  had  been  done.  During  his  administration  he 
paid  252  millions  of  bonds,  notwithstanding  he  expended 
100  millions  more  in  the  payment  of  pensions  than  Presi- 
dent Cleveland, 

The  pension  increase  was  the  first  intimation  of  the 
policy  that  has  been  adopted  to  dis.sipate  the  surplus  so 
that  it  could  not  be  used  to  pay  the  bonds,  which  has 
develoi)ed  into  the  present  expenditures.  President  Har- 
rison thought  that  it  was  better  and  more  patriotic  to  in- 
crease the  pensions  than  to  squander  the  money  of  the 
people  to  save  the  banking  system — but  he  would  not  de- 
posit the  surplus  in  the  banks  so  long  as  he  could  use  it 
in  paying  the  bonds. 


THE  EVOLUTION  OF  MONEY.  107 

Neither  part}-  liked  tlie  altitude  of  the  goverumeut 
towards  silver.  The  owners  of  silver,  and  a  fai-tiou  of  the 
]Jemocratic  part^-,  wanted  it  restored  to  its  constitutional 
right,  as  a  legal  valuator,  and  given  ••use-value"  equally 
with  gold. 

The  Money  Power,  the  Eepublican  party,  and  the  fac- 
tion of  the  Democratic  party,  led  by  Mr.  Cleveland, 
wanted  it  driven  entirely  from  circulation ;  claiming  that 
the  country  was  on  the  gold  standard,  and  that  it  was 
wrong  to  give  silver  the  power  of  the  Tender,  as  a  legal 
valuator  of  the  ••word,"  dollar,  at  the  ratio  of  IG  to  1. 

The  vSilver  re]»ublicans  and  the  Silver  democrats  joined 
against  the  Money  Power,  as  it  mustered  the  Gold  repub- 
licans and  the  Gold  democrats  to  its  defense. 

The  issue  was  in  doubt  until  the  Money  Power  secured 
the  adherence  of  the  Silver  republicans,  by  the  agreement 
to  buy  the  yearly  output  of  silver,  at  the  valuation  of 
41614:  grains  to  the  dollar,  as  was  supposed. 

In  consideration  of  this  agreement  of  the  Money  Power 
to  have  its  republican  and  democratic  cohorts  use  the 
money  of  the  people  to  buy  their  annual  yield  of  silver, 
the  Kepublican  silver  owners  agreed  to  assist  in  passing 
a  law  that  established  the  gold  standard. 

This  law  is  known  as  the  Sherman  law,  and  is  not  open 
in  its  terms,  for  if  it  had  been  it  would  never  have  l)een 
passed.  In  the  first  place,  it  tricked  the  Silver  repub- 
licans, for  under  its  provisions  they  were  only  paid  the 
commodity  price  of  silver,  and  not  its  -tlOi/4  grains  to  the 
dollar  value,  a.s  they  understood  when  they  made  the 
agreement. 

In  the  second  place,  it  tricked  many  who  voted  for  it, 
in  the  provision  that  the  Secretary  had  the  option  to  pay 
the  certificates — issued  for  the  purchase  of  silver — in  gold 
or  silver;  for  they  did  not  know  that  the  obligation  ••to 
maintain  the  parity  of  the  two  metals"  would  make  it 
obligatory  to  pay  them  with  gold  coin  only.  Having 
secured  the  passage  of  the  Sherman  law  during  ]\Ir.  liar- 


108  THE  EVOLUTION  OF  MONEY. 

rison's  administratiou,  they  proceeded  to  put  its  hidden 
iniquities  iuto  effect. 

The  owners  of  silver — as  soon  as  they  received  the  cer- 
tificates— presented  them  for  redemption  in  gold,  and  the 
bankers  bought  up  the  "Greenbacks"  and  presented  them 
for  redemption  in  gold,  also. 

The  purpose  of  this — and  the  Sherman  law  was  framed 
for  that  purpose — was  to  distress  the  government  in  its 
Gold  Eeserve,  until  it  and  the  people  would  be  willing 
that  both  the  "Greenbacks"  and  silver  should  be  deprived 
of  "use-value,''  retired  from  circulation,  and  all  the 
"use-value"  of  the  country  turned  over  to  the  gold  owners 
and  bankers. 

This  was  to  be  accomplished  by  withdrawing  the 
"Greenbacks"  and  the  Sherman  notes  from  circulation, 
and  use  them  so  incessantly  and  continuously  to  raid 
the  Gold  Eeserve,  that  the  Government  would  be  com- 
pelled to  sell  bonds  to  buy  gold  until  the  people  would 
be  so  distressed  in  their  private  affairs,  and  so  burdened 
in  public  debt,  that  they  would  agree  to  anything  to  get 
relief. 

Mr.  Harrison  was  too  able  a  lawyer,  too  patriotic  a 
citizen,  and  too  honest  a  man  to  be  used  for  any  such  pur- 
pose, and  he  continued  the  purchase  of  silver,  the  re- 
demption of  the  "Greenbacks"  only,  with  gold,  and  the 
payment  of  bonds  with  the  surplus. 

While  he  was  using  the  surplus  to  pay  the  bouds  at 
the  rate  of  252  millions  for  his  administration,  and  refus- 
ing to  deposit  any  of  it  in  their  banks,  the  Money  Power 
redoubled  its  efforts  to  exhaust  the  Gold  Keserve,  so  that 
they  could  force  him  to  issue  bonds  to  purchase  gold  and 
replenish  the  reserve,  which  they  were  criminally  exhaust- 
ing. 

They  went  so  far,  in  anticipation  of  their  intention  to 
exhaust  the  Gold  Eeserve,  that  they  induced  his  weak, 
if  not  complaisant.  Secretary  of  the  Treasury  to  have  the 
plates  for  the  issue  of  the  bonds  prepared  while  Mr.  Har- 


THE  EVOLUTION  OF  :,IOXEY.  209 

risen  was  absent  from  Washiugtou,  so  that  they  would 
lose  uo  time  in  having  bonds  issued  before  another  ad- 
ministration was  elected,  for  it  was  at  the  end  of  his. 

When  he  Avas  acquainted  with  the  subservient,  if  not 
dishonorable,  part  he  was  expected  to  play — if  he  wished 
to  be  re-elected — he  refused  to  order  the  bonds  to  be 
issued,  and  the  raids  upon"  the  Gold  Eeserve  ceased,  for 
nothing  was  to  be  gained  from  him. 

The  Republican  party  had  indicated  its  intention  to 
renominate  Mr.  Harrison,  and  the  Money  Power  turned  to 
the  Democratic  part}'  for  assistance,  and  helped  it  elect 
Grover  Cleveland  a  second  time  to  the  presidency. 

That  party  thought  it  was  going  to  repeal  the  Sherman 
law,  or  at  least  the  part  of  it  which  obligated  the  govern- 
ment to  preserve  the  ''parity  of  the  metals,"  and,  thereby, 
relieve  the  Gold  Eeserve  of  the  obligation  of  having  to  pay 
the  silver  certificates — for  the  platform  of  principlcis  so 
read  to  common  intelligence. 

Mr.  Cleveland,  and  his  faction,  after  he  was  elected, 
did  not  so  construe  the  platform,  but  contended,  inas- 
much as  it  obligated  the  party  to  preserve  the  ''parity," 
that  it  was  an  endorsement  of  the  Gold  Standard.  Mr. 
Cleveland  was  correct,  for  the  platform  had  been  written 
both  ways — one  to  catcli  the  voters — and  it  had  caught 
enough — the  other  for  Mr.  Cleveland  and  the  representa- 
tives of  the  3Iouey  Power,  both  Democrats  and  Repub- 
licans, to  enforce. 

The  Sherman  law  was  sustained,  and  the  raids 
were  so  incessant,  and  so  profitable,  that  when  1(13 
millions  of  bonds  had  been  sold  to  his  financial  friends 
privately,  through  the  agency  of  a  former  law  partner 
at  prices  far  below  their  market  value,  the  people 
denounced  him  so  bitterly,  and  so  seriously  questioned 
the  honesty  of  his  conduct,  that  they  forced  a  public  sale 
of  the  next  100  millions,  at  a  much  higher  price  than  the 
others  brought,  but  the  gold  standard  was  finally  secured. 


XIO  '^HE  EVOLUTIoy  OF  ^lONEY. 

It  was  a  desperate  fight  on  the  part  of  the  gold  owners 
and  bankers  to  secure  for  their  exclusive  l)eneflt  the  "use- 
value"'  that  the  government  had  given  the  people  in  the 
service  of  378  millions  of  silver,  purchased  under  the  law 
of  1878,  as  it  was  being  enlarged  by  the  government  notes, 
issued  in  the  purchase  of  silver  under  the  Sherman  law  of 
1890. 

The  fight  was  so  desperate  on  the  part  of  the  gold 
ow^ners,  and  bankers,  backed  up  by  the  President  and 
the  leaders  of  the  Money  Power  in  the  Republican  and 
Democratic  parties,  that  it  was  fatally  destructive  to  the 
people,  for  they  had  to  fight  without  money,  while  it  was 
being  used  to  destroy  them. 

It  was  merely  the  manipulation  of  money  by  the  gold 
owners,  and  bankens — through  the  power  of  the  gov- 
ernment as  it  was  exercised  by  the  President  and  Con- 
gress— to  force  upon  the  practices  of  the  i)eople  the  ac- 
ceptance of  the  Money  Power's  claimed  constitutional 
right  to  be  the  exclusive  beneficiaries  of  all  "use-value," 
notwithstanding  Congress  had  bestowed  "use-value"  on 
silver  for  the  benefit  of  the  people;  and  the  "Greenbacks"' 
were  used  to  help  win  the  fight,  notwithstanding  the 
Supreme  Court  had  decided  that  they  were  as  much  en- 
titled to  "use-value"  as  gold  coin. 

The  excmse  for  this  fight  that  pauperized  the  people, 
depopulated  States,  and  caused  untold  misery,  was  the 
preservation  of  the  Gold  Fund ;  a  fund  that  was  unneces- 
sary even  before  it  was  legalized,  and  the  law  for  which 
was  virtually  abrogated  Avhen  the  Supreme  Court  decided 
that  the  "Greenbacks""  were  as  much  money  as  gold  coin. 

What  principles  of  law  and  of  government  were 
asserted  by  President  Cleveland  in  saving  to  the  gold 
owners  and  bankers,  under  his  maintenance  of  the 
"parity  clause,"  the  value  of  the  service  that  the  "Green- 
backs,"' silver,  and  silver  certificates  were  rendering  to 
the  people? 

First. — He  asserted  that  the  issue  of  money  was  a  pri- 


THE  EVOLUTION  OF  MONEY.  HI 

vate  right — not  the  exercise  of  a  sovereigu  power — not- 
withstanding the  tSupreme  Court  had  decided  that  it  was 
the  exercise  of  a  sovereign  power. 

tSecond. — He  asserted  that  when  Congress  deprived  the 
owners  of  silver  of  their  constitutionally-secured  right  to 
use  their  metal  at  the  value  of  41<>i4  grains  to  the  dollar, 
as  standards  of  payment,  it  performed  an  act  that  wa.^i 
legal  and  binding. 

Third. — He  asserted  when  the  Congress  of  ISTS  partly 
restored  to  silver  its  right  to  "use-value""  by  giving  it  legal 
tender,  but  not  the  right  to  be  used  at  the  value  of  4101/4 
grains  to  the  dollar,  that  it  was  an  infringement  of  gold's 
constitutionally-secured  right  to  all  "use-value."" 

Fourth. — He  asserted — when  the  Congress  of  187S 
obeyed  the  mandate  of  the  people  and  ordered  the  reissue 
of  the  "Greenbacks,"  which  compliance  the  Supreme 
Court  decided  gave  them  as  much  right  to  legal  tender,  or 
"use-value,""  as  gold  coins — that  it  was  nevertheless  an  iu- 
f  I'ingement  upon  the  right  of  the  owners  of  gold  to  all  legal 
lender,  or  "use-value;"'  and  that  the  "Greenbacks"'  had 
no  right  to  legal  tender,  or  "use-value,"  except  as  they 
acquired  it  from  the  right  to  be  paid,  or  redeemed,  out  of 
the  Gold  Keserve,  notwithstanding  the  court  had  decided 
they  were  as  much  money  as  were  the  gold  coins. 

Fifth. — He  asserted — when  the  Congress  of  ISOO  au- 
thorized the  purchase  of  a  large  amount  of  silver  each 
year  by  the  issue  of  certificates  which  could  be  used  by  the 
people — that  it  also  was  an  infringement  upon  the  ex- 
clusive right  of  the  gold  owners  and  bankers  to  all 
"use-value,"  and  if  they  could  not  be  protected  in  the 
enjoyment  of  their  constitutionally-secured  right,  except 
by  working  the  "parity""  trick,  he  could  l)e  relied  on  to 
bring  the  country  to  a  realizing  sense  of  the  sacredness 
of  their  rights,  even  if  he  bankrupted  the  government, 
depopulated  some  of  the  States,  and  pauperized  the  jicople. 


CHAPTER  IX. 


INCE  the  issue  of  mone}',  according  to  the  latest 
decision  of  the  Supreme  Court — as  it  has  en- 
deavored to  make  the  laws  square  with  the  prac- 
ticevS  of  the  people — is  the  exercise  of  a  sovereign  power; 
and  since  the  exercise  of  that  power  dominates  the  exer- 
cise of  all  the  other  sovereign  powers,  is  it  not  essential 
that  Congress  should  devise  a  way  to  exercise  said  power 
in  the  interest  of  all  the  people? 

If  the  most  dominant  of  the  sovereign  powers  cannot, 
or  ma}'  not,  be  exercised  in  the  equal  interest  of  all  the 
people  by  the  body  that  is  chosen  to  exercise  sovereign 
powers,  is  this  a  democratic  or  republican  government? 

Is  it  not  merely  a  plutocracy  of  money  and  industrial 
slavery,  masquerading  as  a  democracy,  or  a  republic, 
under  the  rule  of  a  few  financiers? 

If  it  is  denied  that  it  is  a  plutocracy ;  if  it  is  denied  that 
the  issue  of  money  is  the  exercise  of  a  sovereign  power; 
but,  on  the  contrary,  contended  that  it  is  the  exercise  of  a 
private  right  that  has  been  enjoyed  for  over  a  century 
imder  a  republican  or  democratic  form  of  government 
that  shall  not  be  changed,  then  the  anarchists  lower  down 
the  scale  of  life  may  be  expected  to  assert  their  rights 
against  the  anarchists  at  the  top.  But  the  right  to  exer- 
cise the  sovereign  power  to  issue  money  is  not  the  only 
advantage  that  the  government  has  given  the  anarchists 
at  the  top. 

It  has  heretofore  been  stated  that  the  States  reserved 
the  exclusive  power  to  grant  charters,  and  the  exclusive 
right  to  exercise  control  over  them;  and  that  this  power 
and  right  was  secured  by  the  constitutional  provisions, 
which  restricted  the  enjoyment  of  the  privileges  of  the 


THE  EVOLUTION  OF  llOXEY.  1I3 

States,  and  the  right  to  the  jui'isdictiou  of  the  United 
States  courts,  to  ''citizens"  of  the  States  in  order  that 
corporations  might  be  excluded. 

It  has  also  been  stated  that  Congress — in  the  interest 
of  the  gold  and  silver  owners — infringed  upon  the  re- 
served power  of  the  States  to  grant  charters,  by  granting 
a  charter  for  a  bank  with  authority  to  issue  notes;  and 
that  the  Supreme  Court  infringed  upon  the  exclusive 
right  of  the  States  to  control  their  corporations,  when  it 
decided  that  the  grant  of  a  charter  was  a  contract,  and, 
as  a  corollary,  that  corporations  were  citizens. 

The  Supreme  Court  not  only  made  the  corporations  of 
the  States  '"citizens,"  but  it  made  them  of  much  higher 
importance  than  the  citizens,  for  it  made  them  quasi-state 
sovereignties,  when  it  decided  that  the  grant  of  a  charter 
was  a  contract.  As  quasi nstate  sovereignties,  the  court 
guaranteed  that  they  should  exercise  their  charter- 
acquired  rights,  free  from  interference,  regulation,  or 
control  of  the  States. 

Therefore,  if  a  State  should  inadvertently,  ignorantly, 
or  corruptly  grant  a  charter  to  a  corporation,  in  which 
was  included  the  exercise  of  one  of  its  sovereign  powers, 
or  the  right  to  a  joint  exercise  of  one  of  its  sovereign 
powers,  it  could  never  regulate  the  exercise  of  the  charter 
rights  excejjt  by  the  consent  of  the  Supreme  Court. 

It  will  not  do  to  say  that  the  legislatures  may  not  grant 
the  exercise  of  sovereign  powers  to  corporations,  for  that 
implies  the  sovereign  powers  of  the  States  are  so  well 
known  that  the  courts  would  detect  the  error, 

.  The  cause  of  the  suffering  that  afflicts  the  people  is  the 
ignorance  of  Congress  as  to  what  are  the  sovereign  powers 
of  the  I'nited  States;  the  ignorance  of  legislatures  as  to 
what  are  the  sovereign  jtowers  of  the  States;  and  the 
ignoi-ance  of  the  Sui)reme  Court  as  to  what  are  the  sov- 
ereign powers  of  both  the  I'nited  States  and  the  States, 
and  what  are  its  own  pOAvers. 
8 


114  2'-^^'  EVOLVTIOy  OF  MOXEY. 

From  some  of  its  decisions  it  appears  that  the 
court  is  of  the  opinion  that  all  sovereign  power  was 
finally  lodged  in  it,  onh-  to  be  exercised  b}-  Congress  and 
the  States  as  it  might  suggest,  and  would  permit. 

It  took  the  intelligence  of  that  court  over  one  hundred 
years  to  ascertain  that  the  issue  of  money  was  the  exercise 
of  a  sovereign  power.  This  negligence  was,  in  great  part, 
due  to  the  fact  that  the  framers  of  the  Constitution  for- 
bade the  States  to  emit  bills  of  credit,  and  attempted  to 
withhold  the  exercise  of  that  power  from  Congress,  in 
order  that  the  claimed  private  right  of  the  gold  and  silver 
owners  to  issue  money  might  not  be  infringed. 

If  it  took  the  Supreme  Court  one  hundred  jearn  to  find 
out  that  the  issue  of  money  was  an  exercise  of  the  sover- 
eign ijower,  is  it  not  jiossible  that  the  exercise  of  some  of 
the  charter  powers,  that  it  decides  are  contracts,  are 
State  sovereign  powers  which  the  legislatures  could  not 
and  should  not  grant,  and  that  it  is  destroying  the  form 
and  changing  the  spirit  of  government? 

The  framers  of  the  Constitution  knew  that  the  States 
could  exercise  their  sovereign  power  to  tax,  and  to  impose 
a  tariff  upon  anything  imjiorted  from  foreign  countries, 
or  carried  from  one  State  to  another,  but  they  did  not 
think  it  wise  to  leave  them  the  right  to  exercise  that  power, 
because  it  might  be  unfairly  exercised  to  build  up  certain 
States,  and  to  enrich  the  people  of  certain  States  at  the 
expense  of  the  people  of  other  States. 

The  framers  of  the  Constitution  were  afraid  that  the 
States  might  attempt  to  exercise  the  power,  even  after 
it  was  agreed  that  it  was  best  for  all  that  they  should  give 
it  up,  and  they  cauvsed  the  Constitution  to  read  that  Con- 
gress shall  have  the  exclusive  right  and  power  to  regulate 
commerce  with  foreign  nations,  between  the  States,  and 
with  the  Indian  tribes. 

Therefore  if  the  States  were  to  attempt  to  exercise  this 
power,  under  conditions  which  made  it  seemingly  neces- 
sary. Congress,  as  the  over-lord  of  interstate  commerce, 


THE  EVOLUTIOX  OF  MOSEY.  115 

and  the  protector  of  the  interests  of  all  the  people,  would 
intervene,  and  regulate  the  matter,  i.  e..  determine  what 
might  be  done  so  as  to  preserve  just  treatment  of  the  peo- 
ple in  all  the  States. 

In  this  distribution  of  the  exercise  of  the  sovereign 
powers  of  the  people  between  Congress  iind  the  States, 
there  was  a  well-founded  fear  that  one  or  both  might 
assume  to  exercise  the  sovereign  powers  of  the  other. 

This  would  produce  a  conflict  between  Congress  and  the 
States  that  would  prove  fatal,  unless  there  was  a  wise 
provision  for  its  settlement. 

The  Supreme  Court  of  the  T'nited  States  was  origi- 
nated to  act  as  the  tinal  arbiter  in  all  such  controversies, 
and  the  patriotism  and  wisdom  of  its  members  was 
intended  to  be  the  Iiighest  guarantee  that  could  be  devised, 
to  secure  to  Congress  and  the  States  the  enjoyment  of  the 
exercise  of  the  sovereign  power  that  had  been  bestowed 
upon  the  one  and  reserved  by  the  others. 

When  the  States  have  exercised  sovereign  powers  in 
violation  of  the  interstate-commerce  clause,  it  was  an 
infringement  upon  the  exclusive  right  of  Congress ;  and 
if  it  injuriously  affected  any  of  the  people,  it  was  an  un- 
lawful invasion  of  constitutional  rights. 

These  aggrieved  individuals  have  the  right  to  apply  to 
the  Federal  Courts  for  relief;  and  it  has  so  long  been  given 
them,  more  from  what  Avas  assumed  the  wanton  and 
abusive  exercise  of  power  than  from  the  erroneous  exer- 
cise of  sovereign  powers  surrendered  to  Congress,  that 
they  do  not  now  recognize  any  sovereign  power  in  a 
State,  if  its  exercise  injuriously  affects  ])rivate  interests. 

When  either  Congress  or  the  States  have  erroneously 
or  projjerly  exercised  any  of  the  sovereign  powers  of  the 
j)eop]e,  and  the  matter  has  been  presented  to  the  Supreme 
Court,  it  has  not  considered  whether  the  exercise  was 
that  of  a  sovereign  ])ower,  which  the  one  or  the  other  had 
the  right  to  exercise,  but  only  whether  it  was  an  invasion 
of  private  rights — until  the  exercise  of  poA^er  by  either 


llg  THE  EVOLUTIOX  OF  MOXEY. 

has  ceased  to  be  considered  as  the  exercise  of  a  sovereign 
power,  if  it  injuriously  affects  private  interests,  especially 
the  interests  of  corporations. 

Congress  and  the  States  have  so  long  acquiesced  in  this 
usurpation,  that  what  are  the  sovereign  powers  of  the 
States,  and  what  are  the  sovereign  poAvers  of  Congress 
may  only  be  determined  from  the  decisions  of  the  court, 
if  they  can  be  determined. 

If  Congress  and  the  States,  in  the  proper  exercise  of 
the  respective  powers  necessary  to  preserve  their  exist- 
ence, should  injuriously  affect  the  interests  of  some  of  the 
people,  could  the  Federal  Court  give  relief  to  an  aggrieved 
individual  on  the  ground  that  it  was  an  invasion  of  his 
constitutionally  secured  private  right? 

If  the  court  should  decree  the  relief,  and  Congress  and 
the  States,  either  from  respect  or  from  any  other  motive, 
should  acquiesce  in  the  decision,  then  all  sovereign  power 
is  finally  lodged  in  the  Supreme  Court,  and  we  have  a 
government  unknown  to  the  science  of  governing  people. 

If  the  Supreme  Court  is  not  bound  by  acts  that  are  the 
proper  exercise  of  sovereign  powers,  and  can  nullify  them 
whenever  they  injuriously  affect  its  favorites,  then  why 
continue  to  talk  about  the  sovereign  ])Owers  of  govern- 
ment ? 

Why  not  admit  this  is  not  a  republic — not  a  democ- 
racy— not  a  plutocracy  of  money  and  industrial  slavery — 
but  merely  a  dynasty  of  financiers  that  the  Supreme 
Court  has  developed  out  of  the  Constitution  for  the  pro- 
tection of  corporate  interests? 

The  interstate-commerce  clause  was  intended  to  confer 
on  Congress  the  exclusive  exercise  of  the  sovereign  power 
of  all  the  people,  in  the  regulation  of  commerce  between 
the  States.  In  the  indulgence  of  its  exclusive  right  to 
exercise  its  sovereign  power  to  regulate  commerce,  the 
action  of  Congress,  however  much  it  may  injuriously 
affect  private  interests,  is  independent  of  any  action  of 
the  Supreme  Court. 


THE  EVOLCTIOS  OF  MOyEY.  X17 

If  the  States,  however,  s^hould  attempt  to  exercise  the 
sovereigu  power  to  tax  inipoi-ts  or  exports,  or  producti? 
carried  from  oue  State  to  another,  it  would  be  both  a 
violation  of  the  private  rights  of  the  individual,  if 
injuriously  affected,  and  of  the  exclusive  right  of  Con- 
gress; and  the  Supreme  Court  could  correct  the  State, 
either  at  the  complaint  of  the  individual,  or  of  some  offi- 
cial representative  of  the  government. 

The  Supreme  Court  has  not  been  content  to  discharge 
the  dignified  duties  assigned  it,  but,  utterly  ignoring  both 
the  right  of  Congress  and  of  the  States  to  uncontrollably 
exercise  their  respective  sovereign  powers,  has  assumed 
that  neither  had  any  independent  nor  sovereign  powers 
they  could  exercise,  if  the  exercise  affected  so-called 
private  rights.  It  has  also  assumed,  if  private  interests 
were  affected  by  the  exercise  of  power,  the  exercise  could 
not  be  that  of  a  sovereign  power ;  and,  therefore,  any  exer- 
cise of  power  that  affected  so-called  private  rights  could 
be  regulated,  modified,  or  nullified,  as  it  deemed  wisest 
and  bast.  If  the  court  could  assume  to  regulate  the  exer- 
cise of  sovereign  powers  by  Congress  without  dissent, 
what  show  did  the  States  have  to  retain  the  right  to  exer- 
cise any  of  their  reserved  sovereign  powers,  free  from  its 
supervision? 

When  Congress,  by  the  grant  of  a  charter  to  a  l)ank, 
assumed  to  exercise  in  the  interest  of  the  gold  and  silver 
owners,  one  of  the  sovereign  powers  which  the  States 
refused  to  give  to  Congress,  the  conflict  between  the  soa-- 
ereignties  could  only  be  adjusted  by  the  Supreme  Court. 

The  State  of  Georgia  properly  exercised  its  sovereign 
power  to  tax  a  bank  to  which  Congreiss  had  Improperhi 
exercised  its  sovereign  power  to  grant  a  charter  of  incor- 
poration. 

The  Supreme  Court  was  virtually  asked  to  decide 
whether  the  State  or  Congress  had  the  exclusive  right  to 
exercise  the  sovereign  jiower  to  grant  charters  of  incor- 
poration, but  it  never  saw  the  real  issue  in  the  case ;  and 


118  THE  EVOLUTION  OF  2I0NEY. 

instead  of  eoutsidei-iug  the  case — as  was  constitutionally 
intended — it  resorted  to  a  subterfuge  to  acquire  jurisdic- 
tion that  it  might  befriend  the  bank. — Bank  vs.  Dcveaux, 
5  Cranch  ( S.  C.  Ivep.),  01. 

This  Avas  the  first  of  the  long  line  of  decisions  that  has 
taken  from  the  States  the  exclusive  exercise  of  their  re- 
served soA'ereign  powens  over  their  corporations ;  a  power 
which  it  was  thought  had  been  secured  in  the  constitu- 
tional use  of  the  word  citizen,  to  exclude  corporations 
from  the  right  to  the  jurisdiction  of  the  Federal  Courts. 

Congress,  a  second  time,  infringed  upon  the  reserved 
right  of  the  States  to  exclusively  exercise  the  sovereign 
power  to  grant  charters  of  incorporation,  when  it  sold 
to  the  owners  of  gold  and  silver  a  charter  for  the  Second 
Bank  of  the  United  States,  with  authority  to  issue  notes. 

The  State  of  Maryland  went  farther  than  the  State  of 
Georgia,  for  it  properly  exercised  its  sovereign  i»ower 
when  by  taxation  it  drove  the  branch  of  the  Congras- 
sional  bank  out  of  the  State,  as  an  unconstitutional  insti- 
tution. This  action  of  the  State  created  a  conflict  over 
the  right  to  exercise  sovereign  power,  as  it  had  been  fore- 
seen and  provided  for  in  the  Constitution — and  for  the 
peaceful  settlement  of  which  the  Supreme  Court  was 
organized. 

In  this  conflict  between  the  State  of  Maryland  and 
Congress  over  the  exclusive  right  to  exercise  the  sovereign 
power  to  grant  charters  of  incorporation,  the  Supreme 
Court  was  called  upon  to  discharge  its  high  constitutional 
duty  and  settle  the  controversy. — McCuUongli  vs.  The 
State  of  Maryland,  4  Wheaton  (S.  C.  Eep.),  313. 

If  the  right  to  tax  was  the  exercise  of  a  sovereign 
power  the  State  should  win,  for  in  the  case  of  the 
First  Bank  vs.  Dcveaux,  the  Supreme  Court  had  admitted 
that  this  power  of  the  State  was  absolute,  uncontrollable, 
and  supreme;  and  that  there  was  no  way  to  escai>e  un- 
just taxation  except  by  the  election  of  a  legislature  which 
would  do  exact  justice  to  all. 


THE  EVOLUTIOy  OF  MOXEY.  119 

If  the  right  to  grant  ehartens  of  incorporation  was  the 
exercise  of  sovereign  jjower  the  State  should  win,  for  the 
exercise  of  that  power  was  withheld  from  Congress,  and 
expressly  reserved  by  the  States. 

If  the  right  "to  emit  bills  of  credit"  was  the  exercise 
of  a  sovereign  i)ower  the  State  should  win,  for  though 
the  States  were  exijressly  denied  the  exercise  of  that 
power,  it  was  no  less  well  known  that  its  exercise  had 
been  withheld  from  Congress;  and  the  issue  of  notes  by  a 
bank  is  the  emission  of  "bilLs  of  credit." 

If  the  power  to  tax,  if  the  power  to  grant  charters  of 
incorporation,  and  the  power  to  emit  ''bills  of  credit'' 
are  the  exercise  of  sovereign  powers,  then  the  State  of 
Maryland  had  the  right — in  the  exercise  of  its  sovereign 
power  to  tax — to  force  the  bank  out  of  its  limits,  since 
Congress  had  neither  the  right  nor  power  to  create  the 
bank  or  to  authorize  it  to  issue  notes. 

The  reserved  sovereign  powers  of  the  States — as  pro- 
vided in  the  Constitution — would  give  the  i)eople  ample 
protection  from  the  aggressions  of  the  Mone,y  Power,  so 
long  as  they  were  recognized  and  regarded  as  sovereign 
powers.  But  if  their  sovereign  powers  could  be,  in  a 
sense,  changed  to  civil  contracts ;  and,  whether  they 
were  sovereign  powers,  or  civil  contracts,  be  determined 
only  by  the  Supreme  Court,  it  would  be  plain  sailing  for 
the  Money  Power  so  long  as  it  could  control  the  intel- 
lectuality of  the  Court. 

This  change  of  the  sovereign  powers  of  the  States  to 
civil  contracts — when  combined  with  the  exclusive  right 
to  the  benefits  that  accrue  from  the  exercise  of  the  sov- 
ereign poAvers  to  issue  money,  and  to  impose  a  tax  on 
imports — is  called  Federalism,  Whigism,  Republicanism, 
/.  €.,  concentration  of  the  sovereign  powers  of  both  the 
States  and  Congress  in  the  hands  of  the  Money  Power; 
and  is  the  Plutocracy  of  Money  and  Industrial  Slavery 
now  dominating  the  country. 

The  case  of  the  State  of  Maryland  was,  therefore,  ad- 


120  ^'-^^^^  EVOLUTIOX  OF  MONEY. 

visedly  held  up  imtil  the  case  from  New  Hampshire — 
known  as  the  "Dartmouth  College''  case^conld  be  so  de- 
cided that  it  might  be  utilized  to  change  the  sovereign 
powers  of  the  States  to  civil  contracts,  which  was,  to  all 
intents  and  purposes,  done  when  the  Supreme  Court  de- 
cided that  the  exercise  of  the  sovereign  power  necessary 
to  the  grant  of  a  charter  of  incorporation,  was  such  a 
contract  as  w^as  protected  by  the  clause  of  the  Constitu- 
tion that  no  State  should  pass  a  law  impairing  the  obliga- 
tions of  a  contract. 

Thus  may  be  seen  how  a  court,  created  to  sit  in  final 
judgment  on  controversies  between  sovereignties — as  to 
their  respective  rights  to  exercise  sovereign  powers — was 
too  partisan  to  realize  the  high  purpose  for  which  it  was 
created,  or  too  unpatriotic  to  care  how  it  discharged  its 
high  constitutional  duties.  Having  decided  that  any  of 
the  sovereign  powers  of  a  State  which  might  ignorantly, 
inadvertently,  or  corruptly  be  granted  to  a  corporation, 
were  by  the  grant  changed  to  a  civil  contract,  the  bank 
could  safely  call  the  Maryland  case  for  trial. 

It  was,  therefore,  no  cause  of  wonder  that  the  Supreme 
Court  ignored  the  sovereign  powers  of  the  States,  and 
decided  that  Congress  had — not  only  the  right  to  exercise 
the  sovereign  power  to  grant  a  charter  of  incorporation 
to  the  bank — but  the  right  to  authorize  the  bank  "to  emit 
bills  of  credit" — the  exercise  of  the  two  sovereign  powers 
that  were  withheld  from  Congress. 

It  not  only  decided  against  the  States — in  the  conflict 
over  the  right  to  exercise  sovereign  powers — but,  as  it 
was  necessary  to  protect  the  bank,  it  modified  its  former 
decree  in  the  Deveaux  case — as  to  the  absolute  right  of  a 
State  to  tax — and  held  that  the  State  could  not  exercise 
this  (Sovereign  power  if  it  operated  to  destroy  the  corpora- 
tion which  the  Court  was  pleased  to  term  the  Fiscal 
Agent  of  the  Government. 

According  to  the  Supreme  Court's  decision — in  the  case 
of  the  First  Bank  of  the  Ignited  States  against  Deveaux — 


THE  EVOLUTIOX  OF  MOXEY.  121 

though  a  corporation  was  not  a  citizen,  and,  therefore,  had 
no  right  to  the  jurisdiction  of  the  United  States  Courts, 
yet  if  the  stocliholders  were  citizens  of  a  different  State 
from  the  defendant,  they  had  the  right  to  use  the  name 
of  the  corporation,  in  an  action  instituted  in  the  federal 
Court. 

According  to  the  decision  in  the  "Dartmouth  College" 
case,  the  grant  of  a  charter  bv  a  State — even  if  it  inad- 
vertently granted  the  right  to  exercise  one  of  its  sovereign 
powers^was  a  civil  contract,  over  which  it  could  exercise 
neither  regulation  nor  control  so  long  as  the  corporation 
exercised  its  rights,  as  the  Supreme  Court  construed  the 
charter. 

According  to  the  decision  in  the  case  of  McCul lough 
against  the  State  of  Maryland,  Congress  had  the  joint 
right  with  the  States  to  exercise  the  sovereign  power  to 
grant  charters  of  incorporations;  the  exclusive  right  to 
authorize  the  bank  to  ''emit  bills  of  credit ;''  and  the  Court 
had  the  right  to  regulate  the  State's  exercise  of  its  sover- 
eign power  over  its  corporations. 

The  States  have,  therefore,  been  changed  from  sover- 
eignties that  had  the  Constitutional  right  to  exclusively 
exercise  certain  sovereign  powers,  to  a  nondescript  form 
of  government  only  having  such  right^s  and  powers  as  the 
Supreme  Court  might  designate. 

But  to  maintain  the  theory  that  they  are  sovereignties 
that  have  the  Constitutional  right  to  exclusively  exercise 
some  sovereign  i>owers,  the  Supreme  Court  has  differenti- 
ated their  powers,  and  decided  that  they  are  only  sover- 
eignties in  the  exercise  of  what  it  may  decide  are  their 
police  powers. 

To  this  com])lexion  have  the  sovereign  States  been  re- 
duced by  the  decrees  of  a  Court  originated  as  the  final 
arbiter  in  all  conflicts  between  Congress  and  the  States 
over  the  right  to  exercise  the  sovereign  ])owers  of  the 
people,  as  they  were  distributed  and  set  forth  by  the  com- 
pact of  the  States,  known  as  the  Constitution  of  the 
United  States. 


CHAPTEE  X. 


HORE  who  had  grown  wealthy  from  the  exclusive 
enjoyment  of  the  benefits  received  from  the  exer- 
cise of  the  sovereign  powers  to  issue  money,  and 
to  lay  a  tax  on  imports,  began  to  use  their  surplus  accumu- 
lations to  purchase  the  corporations  which  were  exercis- 
ing State  sovereign  powers  under  their  charter  rights. 

These  charter  rights  are  called  franchises,  and  are 
granted  by  the  legislatures. 

Some  of  the  more  recent,  or  more  intelligent,  States 
endeavored  to  protect  their  cities  by  giving  them  the  exclu- 
sive right  to  make  the  grant  when  the  exercise  of  the 
charter  rights  was  confined  to  limits  of  the  cities.  The 
city's  grant  of  the  charter  is  then  a  franchise.  Some  pro- 
tect their  cities  by  leaving  the  right  to  grant  the  franchise 
with  the  legislature,  but  if  the  franchise  was  to  be  exer- 
cised in  a  city,  it  was  given  the  right  to  grant  or  withhold 
permission.  The  permission  is  called  a  license.  Some 
gave  their  cities  no  protection. 

The  grant  of  the  charters  could  be  for  a  period  of 
years,  or  indefinite.  The  franchise  when  granted  by  the 
legislature — if  indefinite — is  for  the  life  of  the  corpora- 
tion; the  franchise,  or  the  license,  when  granted  by  the 
city — if  indefinite — is  for  the  life  of  the  city's  charter. 

The  corporations,  in  their  operations,  were  at  first 
local,  and  confined,  in  the  exercise  of  their  charter  rights, 
to  the  State  that  granted  the  charter;  and,  if  they  oper- 
ated in  two  or  more  States,  they  were  compelled  to  oper- 
ate under  two  or  more  charters,  or  under  one  charter 
and  such  permission  as  they  could  obtain  from  the  other 
States. 


THE  EVOLVTIOX  OF  MCiNEY.  123 

As  the  surplus  accumulations  were"  used  to  buy  control 
of  the  corporations  that  were  exercising'  State  sovereign 
powers,  they  were  operated  continuously  and  connectedly 
through  two  and  more  States.  After  having  thus  gradu- 
ally- consolidated  their  corporate  properties — or  their 
right  to  exercise  State  sovereign  powers — the  managers 
began  to  devise  ways  and  means  to  operate  them  as  units. 

This  caused  a  conflict  over  the  right  to  exercise  State 
sovereign  powers,  with  the  States  on  one  .side,  and  corpo- 
rations, exercising  the  State  sovereign  powers  acquired 
by  their  charters — on  the  other. 

The  Supreme  Court  usurped  the  power  of  final  arbiter 
in  all  such  conflicts,  notwithstanding  the  Constitution 
intended  that  it  should  only  decide  conflicts  over  the 
exercise  of  sovereign  power  between  the  Staters  and  Con- 
gress— for  there  was  no  thought  in  the  mind  of  any  of 
the  authors  of  that  instrument  that  corporations  would 
be  made  quasi-state  sovereignties. 

If  the  Supreme  Court  could  so  abuse  its  high  constitu- 
tional trust  as  to  ignore  the  sovereign  poAvers  of  the 
States  until  it  recognized  none  of  said  powers  as  sover- 
eign, except  what  it  was  pleased  to  call  the  police  power, 
what  showing  would  the  States  have  before  that  Court 
in  a  conflict  involving  their  right  to  regulate  the  exercise 
of  charter  privileges,  even  if  the  exercise  was  one  of  the 
sovereign  powers  of  the  State?  The  sovereign  powers  of 
the  States — ignored  and  treated  as  of  no  value  by  the  Fed- 
eral Courts — were,  so  soon  as  they  were  made  civil  con- 
tracts by  grant  of  charter  rights,  transmuted  into  fran- 
chises that  the  Court  decided  were  vested  property  rights. 

Inasmuch  as  a  franchise  is  only  that  sovereign  power 
of  the  State  which  gives  a  corporation  the  right  to  im- 
pose a  toll,  or  exact  a  tax,  for  services  rendered,  is  it 
not  strange  that,  in  the  ojnnion  of  the  Supreme  Court, 
the  power  is  a  mere  worthless  right  until  it  is  secured  by 
a    corporation,    when    it    becomes,  as  a    franchise,  more 


124  '^^^  EYOLUTIOX  OF  MOXEY. 

sacred,  as  propcrtij,  than  the  products  that  are  the  result 
of  the  labor  of  the  people? 

The  carelessness,  inexperience,  and  ignorance  of  State 
legislatures — in  granting  the  sovereign  powers  of  the 
States — gave  the  cori»oratious  power  to  exact  such  toll 
for  the  services  rendered,  that  they  were  enabled  to  pay 
such  large  dividends  upon  the  money  expended  in  con- 
struction, it  had  to  be  concealed.  Concealment  was 
effected  by  issuing  bonds  in  sufficient  amount  to  pay  for 
coU'Struction,  and  then  issuing  stock  to  the  manipulators, 
who,  as  owners  of  the  stock,  managed  and  operated  the 
corporations. 

The  only  investment  that  the  manipulators,  and  mana- 
gers, had  in  the  property  was  the  right  to  unduly  exercise 
the  sovereign  power  of  the  State  to  exact  a  toll  for  the 
services  the  corporation  might  render  the  people. 

To  the  extent  that  they  could  enforce  the  right  to  exact 
toll,  over  the  amount  that  was  necessary  to  pay  the  inter- 
est on  the  bonds  and  the  operating  expenses,  the  stock 
was  valuable;  for  if  they  could  exact  sufficient  toll  to 
pay  interest  on  the  bonds  and  the  operating  expenses, 
and  then  pay  a  dividend  on  the  stock  equal  to  the  rate 
of  interest  they  were  paying  on  the  bonds,  the  stock, 
issued  on  the  abuse  of  the  right,  was  as  valuable  as  the 
bonds  issued  on  labor. 

When  the  States  discovered  that  the  corporations  were 
imposing  on  the  rights  of  the  people  by  exacting  a  toll 
sufficient  to  pay  dividends  on  stock  issued  on  privilege, 
/.  e..  sovereign  power,  as  well  as  interest  on  bonds  issued 
to  pay  for  construction,  they  attempted  to  regulate  the 
charge  of  toll. 

This  was  an  exercise  of  sovereign  power  that  was  de- 
manded of  the  States;  one  which  it  was  intended  they 
should  exercise;  and  one  which  the  Supreme  Court  was 
organized,  as  a  constitutional  guarantee,  that  they  should 
exclusively  exercise. 

But  when  the  corporations  appealed  to  the  Supreme 


THE  EVOLUTIOy  OF  MOyEY.  125 

Court,  aud  claimed  that  the  exercise  of  the  power  bv  the 
States  Avas  a  viohitiou  of  their  contractual  charter  rights, 
the  Court  was  embarrassed,  for  the  proof  showed,  in  many 
cases,  that  the  corporations  were  exacting  more  than  a 
just  and  legitimate  return  on  the  iiioncij  expended. 

The  Court  relieved  itself  of  this  embarrassment  by 
seriously  deciding  that  the  franchise,  /.  c,  the  sovereign 
power  which  had  been  obtained  from  the  legislature  to 
exact  a  toll — however  oppressive,  however  unjust,  and 
however  iniquitous  in  its  procurement  or  in  its  etfect 
upon  the  people — was  ''a  vested  property  right ;"  and 
that  the  incorporators  had  as  legal  a  right  to  collect  toll 
to  pay  dividends  on  stock  and  interest  on  bonds  issued 
on  the  franchise,  as  it  had  to  pay  dividends  on  stock  and 
interest  on  bonds  that  had  been  sold  for  money  to  pay 
for  the  labor  that  constructed  the  corporate  properties. 

This  decision  changed  the  body  and  spirit  of  the  law, 
as  well  as  all  ideas  of  financial  and  political  morals; 
for  if  franchises  were  property,  then  the  easiest  way  to 
accumulate  wealth  was  to  secure  the  franchises  which 
exercised  the  sovereign  powers  of  the  States. 

The  beneficiaries  of  the  exercise  of  the  sovereign  power 
to  issue  money,  and  to  lay  a  tax  on  imports,  were  in  the 
commanding  position  to  secure  the  franchises,  and, 
thereby  secure  the  enlarged  possibilities  for  accumulating 
wealth  that  this  decision  gave. 

The  legal  fraternity  took  on  enlarged  importance,  and 
those  who  best  knew  how  to  devise  methods  to  filch  from 
ignorant,  careless,  or  corrupt  legislatures  charters  which 
gave  the  exercise  of  the  sovereign  powers  of  their  States 
to  corporations,  and  who  best  knew  how  to  persuade  the 
courts  that  the  action  of  the  legislatures  was  what  had 
been  contemplated  by  the  framers  of  the  Constitution, 
became  the  great  lawyers.  Many  were  slow  to  accept  the 
new  order  of  thingiS,  but  the  inducements  were  so  large 
that  old  ideas  of  practice  were  fast  disa])pearing,  when 
the  entry  of  corporate  influence  into  the  ])olitical  arena. 


126  '^^^'^  EVOLUTIOX  OF  MOXEY. 

with  its  rewards  of  judicial  office  and  political  preferment, 
caused  the  patriotism  of  some  to  become  subservient  to 
loyalty  of  servitude  to  corporations. 

By  the  assistance  and  under  the  protection  of  such 
members  of  the  fraternity,  the  sovereign  powers  of  the 
States  have  been  so  concentrated  in  corporations  that 
they  have  become  Frankensteins,  which  overrun  and  defy 
the  States;  exact  kingly  tribute  from  the  people  for  all 
services  rendered;  determine  who  shall  be  the  elective 
officers;  name  the  appointive  officers;  have  abler  and 
stronger  representation  in  the  Senate  than  do  the  States; 
dominates  CougrestS  through  caucus  and  a  set  of  rules, 
until  it  has  been  turned  over  to  a  Speaker,  and  a  com- 
mittee of  three,  w  ho  are  under  their  control ;  helps  Presi- 
dents write  their  messages;  puts  their  ablest  lawyers  in 
the  cabinet  to  advise  how  their  interests  should  be  pro- 
tected; and  were  exjiloiting  the  country  until  it  became 
so  oppressive  and  flagrant  that  the  people  revolted  and 
goaded  their  officials  into  a  show  of  corrective  resistance. 

This  was  not  brought  about  until  the  insolence  of  the 
corrupt  poAver  of  the  Frankensteins  had  defied  Con- 
gress and  jeered  at  the  fulminations  of  the  President. 

The  unwholesome  conditions  were,  in  great  part,  occa- 
sioned by  unwise  decisions  of  the  Supreme  Court.  When 
it  was  realized  that  the  States  had  been  deprived  of  all 
power  to  protect  their  people  from  corporate  impositions, 
and  that  the  impositions  had  become  so  flagrant  some- 
thing had  to  be  done.  Congress  was  induced  to  exercise 
its  sovereign  power  for  their  relief. 

For  years  the  corporations  respected  this  exercise  of 
sovereign  power,  until  it  must  have  been  intimated  to 
them  that  the  Supreme  Court  would  grant  relief  to  its 
cpiasi-state  sovereign  corporatioms,  if  they  would  petition 
for  relief.  The  petition  presented  as  an  issue  the  conflict 
between  Congress  and  the  State  corporations  over  the 
right  to  exercise   the   reserved  sovereign  powers  of  the 


THE  EVOLUTIOX  OF  MO^EY.  127 

States — a  right  hsiu-jxmI  bv  Congress,  and  errouoonsly 
given  to  corporations  h\  the  Snpreme  Court. 

The  Supreme  Court  was  more  respectful  in  deciding 
against  Congress  in  favor  of  corporations  than  it  Avas 
when  it  took  the  power  from  the  States  and  gave  it  to 
corporations;  for  though  the  decision  stated  that  the 
exercise  of  the  power  by  Congress  was  not  mandatory, 
and,  therefore,  could  not  be  enforced,  it  Avas  understood 
to  be  a  warning  that  it  would  be  wise  for  them  to  cease 
some  of  their  aggresisions.  The  corporations  paid  no  at- 
tention to  the  Avarning,  for  when  they  realized  that  they 
were  not  bound  by  Congress'  exercise  of  the  States"  re- 
served sovereign  powers,  they  committed  all  the  excesses 
ingenuity  and  aA'arice  could  devise. 

Financial  and  legal  morals  were  changed — practices 
which  had  always  been  considered  penitentiary  offences 
became  mere  irregularities;  violations  of  the  law  in  corpo- 
rate practices  could  not  be  personal ;  crime  committed 
by  an  individual — as  an  officer  of  a  corjtoration  to  ad- 
vance its  interest — did  not  make  him  personally  liable, 
and  it  bias  not  yet  been  decided  that  the  corporation  can 
be  held  liable  in  a  fine;  trust  funds  were  given  to  elect 
the  President,  and  openly  and  legally  justified  on  the 
ground  that  it  was  necessary  for  his  faction  to  be  in 
power  to  preserve  the  funds;  the  Democratic  party  was 
taken  in  charge;  its  candidate  selected  and  used  to  intim- 
idate tlie  Kepublican  candidate;  for  while  the  Repub- 
lican candidate  was  given  large  contributions,  the  Demo- 
cratic candidate  Avas  informed  of  it,  and  induced  to  make 
the  charge  of  corruption,  Avhich  could  and  Avould  have 
been  sustained  if  it  had  not  operated  to  force  a  com- 
pliance on  the  i>art  of  the  Ivepublican  candidate  to  at 
least  the  harmony  of  a  working  basis  Avith  the  practices 
of  the  Money  Power. 

There  was  reason  for  all  this  duplicity  Avith  the  candi- 
dates of  the  two  parties. 

While  Congress  had  not  openly  resented  the  decision 


128  2'i7L'  EVOLUTIOy  OF  MOXEY. 

that  its  exercise  of  the  States'  reserved  sovereign  powers 
over  corporations  was  only  suggestive,  it  had  seen  proper 
to  pass  an  act  which  imposed  penal  punishment  upon  the 
officers  of  corporations  for  violations  of  its  provisions. 

This  was  an  exercise  of  sovereign  power  under  the 
inter-state  commerce  clause;  and  it  was  hoped  that  all 
violators  of  the  provisions  of  the  act  would  be  punished, 
notwithstanding  the  law  Avas  intended  to  affect — not  the 
action  of  i>VAte  legislatures — as  contemplated  by  the  Con- 
stitution— but  the  conduct  of  corporations. 

The  commission — which  Congress  had  created — had 
been  active  for  years;  had  ascertained  manj-  facts;  and 
was  continually  calling  on  Congress  for  more  power  to 
regulate  corporate  action.  It  had  endeavored  to  regulate 
the  tolls  exacted  for  services  rendered,  until  they  were  a 
just  and  reasonable  return  on  the  money  invested. 

The  orders  of  the  commission  were  obeyed,  until  a  case 
was  carried  to  the  Supreme  Court  which  involved  the 
following  facts:  A  just  and  reasonable  rate  had  been 
established,  and  for  a  time  accepted  by  the  corporations. 
But  when  the  managers  of  the  corporations  realized  the 
possibilities  of  making  money  that  they  were  losing — since 
franchises  were  property  on  which  bonds  and  stocks 
could  be  legally  issued — they  issued  additional  bonds  and 
stock. 

This  is  vulgarly  known  as  watering  the  issues. 

After  this  additional  or  watered  issue  of  bonds  and 
stock  was  made,  the  rate  which  had  been  established  and 
accepted  as  reasonable,  would  not  bring  in  enough  toll 
to  pay  the  operating  expenses,  and  the  interest  and  divi- 
dends on  both  the  original  and  watered  bonds  and  stock. 

The  claim  was  then  seriously  made  by  the  corporations 
that  the  rate  which,  when  established  and  accepted,  was 
reasonable,  had  now  become  confiscatory,  and  a  viola- 
tion of  their  constitutional  rights. 

This  was  an  exaggerated  phase  of  the  conflict  over  the 
right  to  exercise  the  reserved   sovereign   powers  of  the 


THE  ETOLUTIOX  OF  2I0XEY.  129 

States,  but  between  Congress  and  quasi-sovereign  State 
corporations — not  between  Congress  and  the  States — for 
what  is  the  watered  issues  of  bonds  and  stocks  but  the 
capitalization  of  the  right  to  exercise  cliarter-acquired 
State  sovereign  powers? 

The  Supreme  Court  decided  in  favor  of  corporations, 
and  now,  whenever  the  commission  succeeds  in  estab- 
lishing a  rate  that  is  reasonable  on  the  outstanding  cap- 
italization of  the  right  to  exercise  a  State\s  sovereign 
power  and  the  money  expended  in  construction,  the  cor- 
porations just  revalue  their  right  to  exercise  State  sover- 
eign powers,  and  issue  additional  bonds  and  stocks. 

The  Supreme  Court  shows  all  the  respect  for  the  exer- 
cise of  State  sovereign  powers,  when  they  are  exercised 
by  corporations,  that  the  most  zealous  of  the  State's  Eight 
advocates  could  ask — for  it  holds  that  corporations  have 
the  right  to  exact  tolls  until  their  receipts  are  sufficient 
to  pay  interest  and  dividends  on  the  additional,  or 
watered,  stock  and  bonds. 

When  it  was  realized  that  the  Supreme  Court  had 
forced  upon  the  acceptance  of  the  States-,  and  even  upon 
the  accei>tance  of  Congress,  its  new  doctrine,  viz :  that 
corporations  had  the  right  to  capitalize  their  charter- 
acquired  State  sovereign  powers  to  their  full  valuation 
(and  the  value  of  the  exercise  of  the  sovereign  powers 
of  the  States  is  illimitable),  a  new  era  was  introduced, 
and  will  long  be  remembered.  A  wild,  mad,  criminal  rush 
was  made  to  secure  control  of  the  more  important  corpo- 
rations. 

Banks  were  the  dominant  instruments,  and  one  may 
recall  the  struggle  to  secure  and  combine  the  banks.  The 
corporations  which  owed  their  prosperity  to  their  exclu- 
sive right  to  the  benefits  that  accrue  from  the  exercise  of 
the  sovereign  powers  of  Congress  to  lay  a  tax  on  imports, 
were  valuable,  and  were  taken  into  the  combinations; 
and  as  they  combined,  gained  strength  to  secure  the  cor- 
])orations  exeicising  State  ^sovereign  powers.     This  con- 

9 


130  ^^^^  EVOLVTIOy  OF  MOSEY. 

ceutration  has  i)rogTessed  uutil  less  than  a  dozen  groups 
are  now  to  be  considered.  The  struggle  from  now  on  will 
be  between  these  groups. 

The  disposition  of  Congress  to  enforce  its  sovereign 
power  was  still  manifest,  and  so  reckless  had  become  the 
conduct  of  the  financiers  in  the  manipulation  of  corpora- 
tions the  criminal  statutes  looked  dangerous. 

Their  only  protection  from  the  enforcement  of  the 
criminal  statutes,  until  they  could  be  repealed  or  made 
ineffective,  was  the  inaction  of  the  officials. 

The  Supreme  Court  could  be  relied  on  until  Congress 
awakened  to  a  realization  of  its  absurd,  if  not  criminal, 
subserviency  to  the  court,  but  if  it  should  ever  awaken,  it 
might  take  such  action  as  would  induce  the  courts  to  fill 
the  penitentiaries  with  millionaires  and  managers  of 
corporations.  It  was,  therefore,  necessary  for  the  groups 
to  secure  more  representatives  in  both  the  Senate  and  the 
House  who  would  sustain  the  Supreme  Court. 

Sustaining  the  Court  is  adroitly  accomplished  by  the 
patriotic  insistence  that  it  has  the  right  and  power  to 
finally  pass  upon  the  constitutionality  of  any  of  the  sover- 
eign pOAvers  that  Congress  may  exercise. 

The  patriotism  of  the  President,  of  the  members  of 
Congress,  of  the  officiaks  of  the  government,  of  the  State 
officials,  and  of  the  people  may  only  be  shown  by  un- 
bounded respect  for  and  blind  obedience  to  the  decrees 
of  that  Court,  even  when,  in  effect,  they  operate  to  veto 
the  exercise  by  Congress  of  the  sovereign  power  of  all 
the  people — though  the  exercise  may  be  essentially  neces- 
sary to  protect  the  i^eople  from  the  corporations. 

This  so-called  patriotism  demands  that  Congress  shall 
accord  to  the  Supreme  Court  this  respect,  though  it  vir- 
tually gives  the  court  the  right  to  put  a  veto  on  its  exer- 
cise of  sovereign  })Ower — a  right  which  the  frnmers  of  the 
Constitution  denied  to  the  court,  though  it  was  only  to 


THE  EVOLUTIOX  OF  MOXEY.  131 

be  exercised  in  conjunction  with  and  as  legal  adviser  to 
the  President. 

There  is  not,  nor  can  there  be,  under  our  Constitution, 
but  one  veto  on  the  exercise  of  the  sovereign  powers  by 
Congress,  and  that  is  the  veto  of  the  President,  which 
can  be  set  aside  by  a  two-thirds  vote  of  that  body;  and 
it  is  unpatriotic  for  Congress  to  submit  to  the  decisions 
of  the  Supreme  Court,  when  they  ojierate  to  veto  their 
action,  even  it  was  for  the  good  of  the  people;  but  it 
becomes  treason  when  it  is  submitted  to,  as  patrioti.sm,  in 
order  that  corporations  may  continue  their  nefarious 
plundering. 

Therefore,  while  corporate  representatives  were  en- 
deavoring to  quietly  repeal,  or  make  ineffective,  the  crim- 
inal statutes  against  corporations,  a  bill  was  ostensibly 
introduced  in  the  51)th  Congress  to  curb  their  rapacity; 
and  there  was  witnessed  the  great  farce  of  leading  states- 
men in  the  two  parties  endeavoring  to  show — not  from 
the  Constitution  as  it  was  written,  and  the  science  of 
government  as  it  has  been  formulated  from  the  experi- 
ence of  centuries — but  from  the  decrees  of  the  Supreme 
Court  construing  the  Constitution — whether  it  had  ever 
been  inadvertently  admitted  tliat  Congress  had — not  the 
sovereign  i»ower — but  the  right  to  pass  a  Eate  Regula- 
tion law?  T'nless  such  an  admission  could  be  found,  it 
Avas  contended  it  was  not  worth  while  to  pass  a  law  only 
to  have  it  set  aside  on  the  ground  that  Congres^s  did  not 
have  intelligence  enough  to  correctly  express  its  constitu- 
tional rights — /.  r.,  exercise  the  sovereign  powers  of  the 
people. 

The  able  attorneys  of  the  corporations — in  anticipation 
of  this  i)lay — endeavored  to  teach  the  people  through  the 
newsi)apers,  magazines,  and  other  methods  that  the  cor- 
porations were  under  the  exclusive  control  of  the  States 
— and  that  neither  the  Constitution  nor  the  decrees  of 
the  Su])reme  Court  gave  Congress  any  control  over  them ; 


132  '^'^^^  EVOLUTIOX  OF  MOXEY. 

and  they  called  upon  the  States  to  resent  sncli  an  intru- 
sion of  their  sacred  reserved  rights. 

Some  of  the  goTernors,  in  ignorance  that  the  Supreme 
Court  decrees  had  transferred  the  exercise  of  their  State's 
►sovereign  powers  to  the  corporations,  responded  to  the 
call  of  the  attoruevs  in  a  too  matter-of-fact  way;  and 
with  their  commissions  and  legislatures  began  to  regu- 
late the  rates  of  the  railroads,  until  they  were  stopped 
by  injunctions  of  the  Federal  Courts.  These  injunctions 
tended  to  make  the  contemplated  farce  a  reality,  for  there 
was  such  imperative  necessity  for  the  exercise  of  sover- 
eign power,  that  enough  republicans  broke  through  party 
lines  to  pass  a  law  for  the  proper  regulation  of  rates, 
had  not  the  President — who  was  attitudinizing  as  being 
in  favor  of  the  exercise  of  the  power — been  seemingly 
buncoed  into  giving  his  support  to  a  bill  which  was  ac- 
ceptable to  the  corporations,  because  it  was  ineffective  in 
practice. 

The  possibilities  involved  in  the  decision  of  the  Su- 
lireme  Court,  viz :  that  corporations  might  capitalize  their 
right  to  exercise  the  sovereign  powers  of  the  States,  was 
not  generally  realized  at  first. 

Many  who  had  control  of  corporations  thought  their 
capitalization  was  large  enough :  did  not  understand  how 
they  could  be  bought,  joined  with  others  as  highly 
capitalized,  and  bonds  and  stocks  issued  on  the  combined 
properties,  as  a  new  corporation,  in  double  their  com- 
bined capitalization.  But  they  saw  it  was  being  done,  and 
by  the  most  honorable,  and  most  responsible  of  the  great 
financiers  and  corporation  magnates. 

They  saw  fortunes  doubled  by  the  simple  process  of 
coml)ining  corporate  properties,  and  then  enlarging  the 
cajiitalization  of  the  right  to  exercise  State  sovereign 
powers.  They  saw  this  was  being  done  in  mich  a  manner, 
under  the  advice  of  astute  and  able  lawyers,  that  it  was 
not  a  violation  of  criminal  law  for  the  manipulators  to 
appropriate  the  value  of  the  additional,  or  watered,  cajti- 


THE  EVOLVTIOX  OF  iWXEY.  133 

talizatioii — and  that  the  stoekholdei-s  had  uo  rights  iu  this 
additional  value,  though  it  was  a  debt  upon  their  property. 

They  saw  that  it  was  regarded  as  honorable  to  use 
the  funds  of  their  banks,  and  of  the  insurance  companies, 
to  give  a  market  value  to  the  watered  bonds  and  stock 
until  they  could  be  disposed  of,  Avhen  the  corporations 
were  abancioned,  and  left  to  the  managers  who  could  not 
make  the  receipts  sustain  the  fictitious  values. 

They  saw  that  it  was  considered  honorable  to  pur- 
chase a  controlling  interest  at  the  reduced  price,  and  by 
a  few  improvements,  extensions,  and  the  purchase  of  ad- 
ditional properties  issue  additional  stock  on  enlarged 
capitalization  of  the  right  to  exercise  State  sovereign 
power,  and  unload  it  on  the  people. 

This  continued  as  honorable,  legitimate,  high  finance — - 
recognized  and  approved  by  the  party  in  power — until  the 
idea  of  electing  to  the  Presidency  a  man  who  entertained 
views  of  W,  J.  Bryan  was  treason  to  the  country; 
and  any  use  made  of  any  funds — whether  trust  funds 
or  not — to  defeat  his  election  would  be  lawful,  because  it 
was  patriotic,  honest  and  necessary.  This  generated  the 
promoter  in  high  finance. 

If  the  line  between  thievery  and  honesty  had  been 
rubbed  out,  in  the  permission  given  to  enjoy  the  profits 
that  can  be  made  to  accrue  from  the  ^?upreme  Court's 
construction  that  the  grant  of  a  charter  included  a  license 
to  capitalize  the  exercise  of  State  sovereign  powers,  theii 
there  was  no  deterrent  reason  why  the  jtromoter  should 
not  enter  the  game.  All  he  needed  was  a  State  charter, 
carrying  the  right  to  exercise  some  of  the  State's  sover- 
eign powers  (which  the  States  gave  to  any  one  who  would 
I)ay  the  fees),  and  the  address  to  make  the  people  believe 
they  were  getting  in  on  the  "ground  fioor,"  when  they  paid 
the  price  asked  for  the  bonds  and  stock. 

The  frauds  practiced  upon  the  peo])le  by  these  methods 
were  consideral)le  for  years,  but  they  had  limitations,  and 
were  confined  to  the  over-credulous  and  speculative. 


134  ^'^^  EVOLLTIOS  OF  MOSEY. 

But  after  the  i»romoter  lealizeu  how  profitably  the 
leading  bankers  and  high  financiers  were  working  the 
people,  with  the  deposits  of  the  banlcs,  the  funds  of 
the  trust  and  insurance  comi»anies,  and  bv  contributions 
to  the  party  in  power,  he  took  on  additional  courage  and 
secured  a  chain  of  banks,  trtist  companies,  and  insur- 
ance conijjanies  also.  It  was  now — after  all  fear  of  crim- 
inal responsibility  was  thought  to  have  been  removed — 
a  race  between  the  promoter  who  was  a  born  thief,  and 
the  high  financiers,  who  were  easily  developing  into 
thieves,  for  the  money  of  the  people. 

The  promoters  showed  such  abandon  and  superior 
genius  in  the  methods  adopted,  that  the  financiers  be- 
came alarmed,  and  took  the  necessary  steps  to  destroy 
their  operations.  This  was  easily  done,  btit  dangerous  in 
the  execution,  because  it  could  not  be  done  without  a  local 
panic,  and  any  sort  of  a  panic  excites  the  wildest  and  most 
unreasonable  fear.s  of  the  people. 

A  panic  can  be  made  local,  but  it  is  necessary  to  make 
elaborate  arrangements  to  confine  it  to  the  locality  in- 
tended; for  there  is  danger  that  it  will  become  general, 
if  not  properly  handled.  Therefore,  after  making  all 
arrangements  necessary  to  confine  the  efi'ect  of  the  panic 
to  the  locality  intended,  the  high  financiers — to  the  utter 
demolition  of  the  promoters — called  into  play  their  right 
to  apply  intrin,sic-value  law  to  the  abusive  "use-value"' 
practices  of  the  promoters. 

This  action  of  the  financiers,  who  had  command  of  most 
of  the  gold,  destroyed  the  schemes  of  the  promoters ;  and 
in  the  adjustment  of  all  obligations  in  gold  coins  during 
about  thirty  days,  the  promoters  were  forced  to  transfer 
their  properties  to  the  high  financiers  at  their  own  price. 

The  poor  old  government,  in  the  ignorance  of  its  offi- 
cials, was  made  to  suffer  in  its  treasury,  and  in  the  humil- 
iation of  its  President,  when  he  stood  helpless  in  the 
presence  of  the  representatives  of  the  Money  Power,  and 


THE  EVOLUTIOX  OF  MOyEY.  135 

was  bluffed  into  purchasing  the  immunity  of  the  people 
from  the  threatened  panic  on  the  terms  imposed. 

The  promoters,  in  addition  to  infringing  upon  other 
helds  of  high  finance  that  the  groups  had  preempted,  had 
infringed  on  the  highly  lucrative  field  of  the  tariff-pro- 
tected steel  industry,  by  securing  the  only  property  that 
could  be  made  to  profitably  compete  with  its  United  States 
steel  corporation,  Avhen  they  secured  the  controlling- 
amount  of  stock  in  the  Tennessee  Coal  and  Iron  Company. 

Congress — in  its  desire  to  preserve  the  benefits  of  com- 
petition— had  exercised  its  sovereign  power  to  make  it  un- 
lawful to  combine  two  competitive  corporation,s ;  and, 
since  the  high  financiers  had  paid  no  attention  to  the  law, 
the  President  had  been  trying  to  induce  the  Supreme 
Court  to  decide  that  the  act  was  legal,  so  that  he  could 
separate  into  their  different  units  those  that  had  been 
combined — and  it  was  now  considered  dangerous  to  effect 
such  combinations. 

It  was  worth  while  to  create  a  local  panic  to  secure 
the  Tennessee  Coal  and  Iron  Company  properties  for  the 
United  States  Steel  corporation,  and,  thereby,  secure  a 
monopoly  of  that  industry,  but  even  if  the  panic  was  not 
created  for  that  purpose,  it  could  be  utilized  to  that  end. 

So  it  was  made  to  appear  as  if  the  pauic  Avas  about 
to  get  beyond  control,  and  become  general ;  and  after 
most  of  the  government's  money  had  been  loaned  to  the 
banks,  the  President  was  informed  by  representatives  of 
the  Money  Power  that  he  must  devise  some  way  to  keep 
the  i)anic  from  becoming  general,  for  everything  that  was 
legal  had  been  done  by  them;  and  that  the  only  thing 
they  could  do  that  would  be  effective  was  illegal,  for  it 
involved  the  absorption  of  the  Tennessee  Coal  and  Iron 
Company  by  the  United  States  Steel  Company  purchas- 
ing the  stock  of  that  company  from  the  ])romoters.  In 
addition  to  knowing  that  the  combination  was  illegal,  both 
the  President  and  the  representatives  of  the  Money  Power 
knew  that  he  could  not  keep  them  from  making  the  panic 


136  '^'^^  EVOLUTIUX  OF  MOXEY. 

general,  though  they  had  no  idea  of  doing  such  a  thing, 
or  allowing  it  to  be  done. 

The  statement  was  made  in  the  expectation  of  humil- 
iating the  President  into  giving  his  permission  to  con- 
solidate the  two  corporations ;  and  when  he  consented, 
the  fear  that  the  panic  would  become  general  disappeared, 
and  "use-value"  practices  began  to  resume  their  cus- 
tomary conduct  of  business. 

If  corporate  impositions  are  to  be  continued  as  legal, 
and  sustained  by  the  Supreme  Court  over  the  corrective 
exercise  of  soA^ereign  power  by  both  Congress  and  the 
State  legislatures,  then  Socialism  is  a  logical  necessity; 
for  if  concentration  of  all  wealth  and  power  in  the  hands 
of  the  financiers  and  corporation  magnates  may  only  be 
stopped  by  the  adoption  of  the  principles  of  Socialism, 
then  their  adoption  is  a  dominant  necessity. 


CHAPTEE  XI. 


EESIDEXT  EOOSEVELT  should  be  excused 
many  of  his  statements  in  reference  to  the  duty 
of  the  States  and  of  Congress  in  regulating  and 
controlling  corpoiatious,  for  he  should  not  be  exi^ected  to 
know  better  than  the  members  of  Congress,  and  the  mem- 
bers of  the  legislatures,  how  the  sovereign  powers  were  dis- 
tributed, and  how  Congress  and  the  legislatures  have  been 
deprived  of  the  right  to  exercise  their  respective  sovereign 
powers. 

When  he  sees,  however,  that  the  States  are  compelled, 
and  Congress  willingly  exercises  sovereign  powers  in  sub- 
serviency to  the  rights  of  corporations,  he  does  not  under- 
stand it. 

He  has  been  advised  that  the  States  reserved  the  power 
to  regulate  their  corporations,  and  that  Congress  may 
not  exercise  this  reserved  power,  but  he  ha.s  not  been  ad- 
vised that  the  States  have  been  deprived  of  this  power 
by  the  Supreme  Court;  and,  therefore,  he  has  called  upon 
them  to  take  the  necessary  action. 

He  has  had  an  intimation  of  what  restrains  the  States, 
in  the  injunctive  processes  of  the  Federal  Courts,  and 
there  is  reason  to  believe — while,  he  did  not  refuse  to 
sustain  the  orders  of  the  inferior  courts — that  he  had  the 
intimation  conveyed  to  some  of  the  more  complaisant 
judges  that  he  might  feel  called  upon  to  take  some  action. 

While  the  country  is  awaiting  the  decision  in  the  in- 
junction cases,  the  President  has  responded  to  the  Ameri- 
canism of  his  nature,  and  called  a  convention  of  the 
Governors  to  formulate  some  plan  of  action  by  which  the 
supremacy  of  the  sovereign  powers  of  the  States  could  be 
asserted,  as  the  Constitution  intended.  The  final  result 
of  their  deliberations  must  be  the  conclusion   that  the 


138  ^'^^^  EVOLUTIOX  OF  .MOXEY. 

Supi-eiue  Court  iiifriuged  upon  the  powers  of  the  States, 
Avhen  it  decided  that  the  exercise  of  the  sovereign  power 
to  grant  a  charter  of  incorporation  was  thereby  changed 
into  a  civil  contract  that  the  States  might  not  impair. 

When  the  President,  backed  up  by  the  Governors, 
realizes  this,  he  should  say  of  the  action  of  the  Court,  as 
Jackson  once  said :  "Marshall  has  rendered  his  decree, 
now  let  him  enforce  it.'' 

The  President  is  bold  to  act  when  he  can  determine 
who  is  the  enemy,  and  he  even  strikes — blindly — as  he  did 
after  he  was  taken  advantage  of  l)y  the  hypocrisy  of  the 
Money  Power  and  intimidated  into  giving  his  assent  to 
the  unlawful  consolidation  of  the  Tennessee  Coal  and 
Iron  Company  with  the  Steel  Trust  to  avert  a  panic,  when 
it  was  not  intended  to  be  general ;  and  after  he  was 
offended  by  the  insolence  of  Harriman,  who  is  defiantly 
capitalizing  the  exercise  of  State  sovereign  powers  to 
purchase  the  control  of  transportation  corporations, 
until  he  is  a  menace  to  commerce. 

He  attributed  the  power  that  was  being  so  hypocriti- 
cally and  so  insolently  exercised  to  command  over  gold; 
and,  rightly  regarding  gold  and  not  men  as  the  cause  of  the 
evils,  and  as  the  deadliest  foe  to  the  government,  to  the 
people,  to  morals,  and  to  religion,  he  blindly  struck  it  a 
bloAv,  when  he  ordered  the  sacred  inscription  to  be  taken 
from  the  gold  coins. 

If  it  is  not  his  purpose  to  encourage  and  assist  the 
States  to  ascertain  why  they  may  not  control  their  cor- 
porations, and  when  the  cause  is  ascertained,  remove  it, 
then  the  call  for  the  convention  of  the  Governors  was 
idle,  if  not  dangerous.  The  movement  will  prove  danger- 
ous, even  if  the  convention  and  the  President  should 
realize  that  the  exercise  of  State  sovereign  power.s  to  con- 
trol their  corporations  has  been  made  ineffective  by  the 
Supreme  Court,  for  it  would  now  be  impossible  for  the 
States  to  exercise  intelligent  control  over  many  of  them  if 
the  restraint  was  removed. 


THE  EVOLLTIOX  OF  .VOyEY.  139 

The  ^Niipreine  Court  deeisious  have  created  conditions 
which  may  not  be  ignored,  and  certainly  cannot  be  en- 
tirely changed;  for  the  intelligent  interests  of  the  people 
will  demand  that  corporations— which  now  operate,  as 
units,  through  two  or  more  States — must  be  under  the 
control  of  one  sovereignty — not  under  the  control  of  two 
or  more  sovereignties. 

The  only  sovereign  power  which  could  now^  efliciently 
control  corporations  that  operate  in  two  or  more  States 
is  that  of  the  United  States;  and  when  this  is  realized, 
the  convention  of  the  Governors  and  the  President  could 
very  properly  advise  that  the  States  confer  on  Congress, 
not  only  the  exclusive  exercise  of  the  power  to  grant 
charters  to  all  such  corporations,  but  the  exclusive  exer- 
cise of  the  right  to  control  and  regulate  them.  This, 
however,  should  be  done  only  on  the  express  condition 
that  the  States  resume  exclusive  power  over  the  control 
and  regulation  of  their  corjiorations. 

Such  an  arrangement  would  prove  a  happy  and  proper 
distribution  of  the  exercise  of  sovereign  powers,  pro- 
vided the  corporations  chartered  by  the  States  had  no 
rights,  as  citizens;  and  provided  the  legislatures  and  Con- 
gress might  regulate  and  control  their  respective  corpora- 
tions, free  from  interference  by  the  Supreme  Court,  except 
as  it  was  constitutionally  appealed  to,  to  determine  in  any 
conflict  between  Congreiss  and  the  States,  as  to  which  had 
the  right  to  the  exclusive  exercise  of  certain  sovereign 
powers. 

If  the  exercise  of  the  sovereign  powers  of  the  States 
over  corporations  was  redistributed,  as  above  suggested, 
and  Congress  should  charter,  regulate,  and  control  all 
corporations  that  operated  in  two  or  more  States — with 
due  regard  for  the  rights  of  the  ])eo})le  of  all  the  States — 
the  treatment  of  the  peo])le  would  depend  upon  the  integ- 
rity, capacity,  and  wisdom  of  those  chosen  to  exercise 
the  sovereign  powers  of  the  United  States. 

If  the  exercise  of  the  sovereign  powers  of  the  States 


140  ^'^^^  EVOLITIOX  OF  MOXEY. 

over  foi'poratious  should  be  redistributed,  as  above  sug- 
gested, and  the  States  should  charter,  regulate,  and  con- 
trol their  corporations,  free  from  the  interference  of  the 
Federal  Courts,  the  treatment  of  the  people  would  depend 
upon  the  honesty,  capacity,  and  wisdom  of  those  chosen — 
not  by  the  corporations,  but  by  the  fjeople — to  exercise 
their  sovereign  powers. 

That  is  all  the  protection  that  the  people  of  the  States 
and  of  the  United  States  are  entitled  to,  and  it  is  all 
that  can  be  given,  for  more  cannot  be  secured. 

It  would  give  far  more  protection  than  they  have  ever 
received,  or  will  receive,  from  judicial  officers — appointed 
by  the  rulers  of  faction — who  arrogate  to  themselves  the 
abnormal  and  almost  inconceivable  power  of  changing 
sovereign  powers  to  civil  contracts,  in  order  that  corpo- 
rate interests  may  be  protected  from  the  regulation  and 
control  of  both  the  State  Legislatures  and  Congress. 

The  sovereignty  of  the  States — not  the  quasi-sover- 
eignty  of  State  corporations — would  then  be  represented 
in  the  Senate;  and  its  members — appreciating  that  they 
were  rejjresenting  sovereignties  which  were  exercising 
absolute  control  over  their  corporations — would  be  en- 
couraged to  exercise  absolute  and  wise  control  over  cor- 
porations chartered  by  Congress,  when  they  realized  that 
they  were  exercising  the  sovereign  powers  of  the  T^nited 
States,  free  from  the  interference  of  the  Supreme  Court. 

Freedom  from  intellectual  bondage  to  that  Court  would 
command  the  services  of  the  greatest  intellects  of  the 
country ;  for  where  could  talent  of  the  highest  order  find 
such  a  field  for  its  activity  as  in  the  exercise  of  sovereign 
powers  for  eighty  million  and  more  people? 

Once  intellectually  and  patriotically  free  from  corpo- 
rate influence,  and  Supreme  Court  vetoes,  the  members 
of  Congress  would  rise  to  the  dignity  of  a  proper,  ele- 
vated, wise,  and  patriotic  exercise  of  all  the  sovereign 
powers  of  the  United  States. 

The  exercise  of  the  soA'ereign  power  to  lay  a  tax  on 


THE  EVOLUTION  OF  AIOXEY.  141 

imports  wonld  be  revised,  and  instead  of  being  laid  as 
now — in  fear  of  corporate  hostility  and  in  hope  of  cam- 
paijin  contribntions — it  would  be  so  imposed  as  to  de- 
velop the  strength  of  the  government;  making  it  inde- 
pendent in  its  resources  in  time  of  war,  as  well  as  in 
times  of  peace. 

The  exercise  of  the  sovereign  power  over  immigration 
would  be  revised,  and  instead  of  being,  as  at  present,  in 
favor  of  shipping  corporations  and  to  provide  cheap 
labor  for  other  corporations,  it  would  restrict  the  tide, 
until  the  country  could  assimilate  the  undigested  mass 
that  is  a  menace  to  the  government,  to  morals,  to  the 
customs  of  the  people,  and  to  their  religion. 

It  is  unwise  to  permit  foreigners  to  be  brought  here 
in  such  numbers  that  they  find  it  to  be  to  their  interest 
to  segregate  in  colonies — where  the  process  of  assimila- 
tion is  not  being  carried  forward.  So  long  as  they  are 
permitted  to  colonize  in  such  numbers  that  they  not  only 
retain  their  habits,  customs,  and  language,  but  instruct 
their  children  in  them,  they  are  not  adding  to  our  citizen- 
ship. 

Foreigners  do  not  become  Americanized  except  as  they 
learn  to  speak,  read,  write,  and  think  in  our  language; 
for  until  they  can  think  in  the  language,  they  are  at  such 
a  disadvantage  they  have  to  colonize  to  protect  themselves 
from  the  rapacity  of  those  who  would  take  advantage  of 
their  lieli)lessness  and  ignorance. 

The  exercise  of  the  sovereign  power  to  issue  money 
would  be  radically  changed,  and,  instead  of  its  being  ex- 
ercised in  subserviency  to  the  interest  of  the  gold  owners 
and  bankers,  it  would  be  exercised  as  a  sovereign  power 
should  be,  exclusively  in  the  interest  of  all  the  people- 
not  in  the  interest  of  a  favored  class. 

When  those  who  are  chosen  to  exercise  the  sovereign 
powers  of  Congress  realize  that  the  issue  of  money  is 
the  exercise  of  the  most  dominant  of  the  sovereign  powers, 
they  will  have  full  appreciation  of  the  teachings  of  Adam 


142  '^IIE  EVOLVTIOX  OF  MOXEY. 

Sniitli  and  of  the  observations  of  Sir  James  Stewart 
and  Colweir.s  Ways  and  Means  of  Payment,  on  Money 
of  Account  and  the  "words"  that  compose  it. 

When  it  is  understood  that  the  "words,"  which  com- 
pose the  "Money  of  Account,"  though  called  words  of 
value,  or  the  language  of  finance,  are,  in  scientific  ac- 
curacy, expressions  of  labor;  and  that  the  "Unit  of  the 
Money  of  Account,"  or  the  unit  of  value — as  it  is  more 
generally  known — is  the  unit  of  labor,  patriotic  intelli- 
gence will  be  better  prepared  to  devise  a  method  for  the 
issue  of  money  as  the  exercise  of  a  sovereign  power. 

If  the  necessity  for  expeditious  settlement  of  credits; 
if  the  inconvenience  in  handling  gold  has  compelled  it, 
in  practice,  to  give  way  to  government  notes,  bank-notes, 
and  the  paper  credits  of  the  people  until,  in  the  higher 
financial  centers,  its  use  is  impracticable  and  a  barbarism ; 
if  the  only  use  that  is  now  made  of  gold  coins,  viz :  to  act 
as  standards  of  value — depends  upon  the  power  of  tender 
to  make  them  serviceable  when  demand  is  made  for  the 
payment  of  obligations ;  and  if  the  excuse,  or  the  necessity, 
for  making  the  demand  arises  out  of  conditions  created  by 
corporations  unduly  cai)italizing  their  franchises  and 
licenses,  is  it  not  time  that  legal  tender  be  taken  from  gold, 
and  other  changes  be  made? 

If  gold  coins  should  be  considered — as  they  really  are 
— as  mere  official  .substitutes  issued  by  the  government 
to  be  used  in  the  place  of  the  pajier  credits  of  the  people 
when  the  credits  have  lost  their  right  to  "use-value,"  the 
issue  and  use  of  money  could  be  the  easier  understood. 

For  if  the  legal-tender  or  official  substitutes  are  issued 
to  be  used  in  the  place  of  the  credits  of  the  people,  they 
should  be  of  the  same,  or  a  value  similar  and  equal  to 
that  of  the  credits. 

The  value  of  the  credits  dejjends  upon  the  use  that  can 
be  made  or  the  service  that  can  be  gotten  out  of  them ;  and 
the  only  use  or  service  that  it  was  ever  intended  should 
be  made,  or  gotten   out,  of  them   is  to   liquidate  debt. 


THE  EVOLUTIOX  OF  MOXEY.  143 

whicli  they  do  efficiently  so  long  as  they  have  "use-value." 
Therefore,  since  the  credits  of  the  people  are  only  in- 
tended to  have  "use,"  or  service,  value,  the  official  sub- 
stitute should  only  have  "use-value ;"'  and  gold  coin — not- 
withstanding their  claimed  intrinsic  worth — would  be 
inefficient,  unless  they  had  the  power  of  governmental 
tender  to  compel  their  service,  /.  c,  acceptance,  as  liqui- 
dators of  debt. 

Tf  these  things  be  true,  and  the  only  value  the  official 
substitutes  should  have  is  in  their  use,  /.  c,  service,  as 
liquidators  of  the  paper  credits  of  the  people,  then  the 
official  substitutes  should  not  be  of  a  value  different  from 
the  value  of  these  obligations. 

It  has  been  /shown  that  these  obligations  are  always 
issued  at  the  mutually  agreed  number  of  labor  units  that 
have  been,  or  may  be,  expended  in  creating  products ;  and 
that  their  value  consists  in  their  use — as  solvents  of  debt 
— until  they  are  redeemed  v\ith  other  and  equal  obliga- 
tions. 

If  value  is  labor,  then  value,  or  lal)or,  is  exj)ressed  by 
the  "words"  which  convey  ideas  of  the  units  of  labor 
involved.  The  "word.s"  of  value  are  dollars,  dimes,  cents 
and  mills,  but  these  "irrjrds''  compose  our  "Money  of  Ac- 
count," i.  e.,  our  language  of  finance;  and  the  tise  of  the 
''words"  that  express  the  unit  of  labor  and  its  multiples 
and  subdivisions,  conveys  all  the  ideas  of  value  that  intel- 
ligence can  impart  or  apprehend. 

Vahie,  therefore,  must  be  the  conclusion  of  that  exer- 
cise of  judgment  which  determines  the  usefulness,  or 
worth,  of  the  object  or  objects  under  consideration. 
This  usefulness,  or  worth,  is  best  determined  by  a  coii- 
sideration  of  the  n,umi)er.  efficiency,  and  intelligence  of 
the  units  of  labor,  as  this  is  made  manifest  in  the  utility 
of  the  product;  and  this  conclusion  may  only  be  con- 
veyed to  intelligence  by  the  ''words"  of  the  Money  of  Ac- 
count, used  to  express  the  mutually  agreed  value  of  the 
product. 

The  mutual  agreement  as  to  the  number  of  labor  units 


144  ^'■^£'  EVOLUTION  OF  MOXEY. 

iuvolvod  in  a  treat}'  of  exchange  is  a  contract — a  record 
of  wliicli  is  the  paper  obligation  issned,  stating  the  agreed 
nnmber  of  the  units,  /.  e.,  the  value,  as  it  is  termed,  of 
the  product;  and  the  obligation  is  only  valuable  in  the 
use,  /.  e.,  service,  which  can  be  made  of  it  as  a  liquidator 
of  debt. 

The  legal  tender,  or  offlcial  substitutes,  therefore,  should 
only  be  mere  representatives  of  the  "words"  of  the  Money 
of  Account,  certain  and  stable  in  their  service  or  "use- 
value"- — which  certainty  and  stability'  may  only  be  secured 
hy  the  poicer  of  tender. 

The  only  support  that  the  paper  obligations  of  the  peo- 
ple have  to  maintain  their  "use-value"  is  the  confidence 
That  when  they  are  finally  presented  to  the  ones  wlio 
issued  them,  that  they  will  be  received  in  liquidation  of 
debt,  or  will  be  paid  with  ofticial  substitutes  which  will 
liquidate  an  amount  of  debt  equal  to  their  face  value. 

The  obligations  of  the  people  do  not  need  legal-tender 
to  compel  their  use,  for  they  are  acceptable  so  long  as 
they  are  issued  on  actually  expended  units  of  labor;  and 
in  good  conscience  are  entitled  to  use — as  liquidators  of 
debt — so  long  ais  honesty  controls  in  their  issue  and  use; 
but  in  law  and  equity  they  must  be  paid  in  gold  coin, 
irJienever  avarice  makes  the  demand,  whether  they  have 
lost  their  right  to  "use-value,"  or  whether  they  have  not. 

The  commercial  experience  of  this  country  has  demon- 
strated that  the  honesty  of  the  issue  and  use  of  the 
credits  of  the  peoi>le  has  been  ;such,  that  they  conduct 
97  per  cent  and  more  of  the  volume  of  business,  and 
would  conduct  it  safely  were  it  not  for  the  issue  of  cor- 
porate credits  on  franchises,  in  addition  to  those  issued 
on  labor. 

It  is  so  evident  it  is  noAv  generally  admitted  that  official 
substitutes  are  not  needed,  nor  used,  except  in  the  retail 
trade  (where  the  credits  of  the  people  may  not  be  used), 
and  in  the  settlement  of  the  balances  in  the  wholesale 
business,  and  that  their  use  in  the  two  does  not  conduct 
3  per  cent  of  the  volume. 


THE  EVOLUTION  OF  MONEY.  145 

Valuable  as  gold  is  thought  to  be  intrinsically,  it  can- 
not be  made  to  serve  this  small  use  on  its  inherent  worth, 
but  has  to  be  given  the  power  of  "tender;"  and  by  virtue 
of  this  gift,  avarice  and  lust  for  power  periodically  de- 
mand that  all  the  credits  of  the  people  shall  be  paid  in 
gold,  /.  €.,  legal  tenders.  There  is  neither  economic  neces- 
sity nor  scientific  reason  for  giving  gold  the  exclusive 
right  to  the  legal-tender  jiower;  and  when  it  is  seen  how 
the  gift  is  abused  by  the  periodic  criminal  demand  that 
all  the  obligations  of  the  people  be  paid  in  gold,  thereby 
creating  panics,  it  should  be  deprived  of  the  right. 

If  the  legal-tender  power  should  be  taken  from  gold, 
its  value  would  depend  on  its  commodity  demands. 

The  value  of  its  use,  as  official  substitutes,  however, 
depends  solely  upon  that  power  which  makes  it  a  solvent 
of  debt,  or  the  standards  of  payment,  viz :  the  Legal 
Tender  power. 

The  i)rofits  made  out  of  the  use  of  gold  are  due  both  to 
the  power  of  tender,  and  to  that  manipulation  of  the  use 
and  power  which  enables  the  owners  of  gold  and  corpo- 
rate properties  to  prosper  at  the  expense  of  the  people. 

The  Government,  therefore,  instead  of  giving  the  power 
of  Tender  to  the  owners  of  gold  to  be  manipulated — as 
is  done — should  sell  it  to  Avhoever  desires  to  purchase 
official  substitutes;  and  since  government  notes — made 
full  tenders  in  the  payment  of  private  and  pul>lic  debt — ■ 
have  al]  the  "use-value"  that  is  needed,  or  that  gold 
coin  could  have,  they  should  be  given  the  exclusive  right 
to  the  legal-tender  sovereign  power,  and  sold  to  the  people 
in  such  quantities  as  they  might  find  it  profitable  to  pay 
the  labor  or  ''use-value''  assigned  the  legal-tender  notes. 

The  proceeds  from  the  ^sale  of  the  notes  would  thus 
enure  to  the  benefit  of  all  the  people,  and  the  value  of  the 
service  that  Tender  secures  would  cease  to  be  used  to 
make  those,  who  are  now  the  exclusive  beneficiaries  of 
the  exercise  of  that  sovereign  power,  the  prospective  bil- 
lionaires of  the  present  intrinsic-value  system. 
10 


CHAPTER  XII. 


F  a  change  is  not  made  in  the  issue  of  money  that 
will  cause  the  legal  rights  of  the  gold  owners 
and  of  the  creditors  to  conform  to  the  "use- 
value"  practices  of  the  people,  but  "use-value''  prac- 
tices are  to  continue  at  the  mercy  of  intrinsic-value  de- 
mands, then  nothing  can  be  done  for  the  protection  of  the 
people  until  the  warfare  for  supremacy  between  the 
groups  has  been  fought  to  a  terminaiton. 

The  "use-value"  of  the  obligations  of  the  people — as 
well  as  the  "'use-value"  of  the  notes  of  the  government, 
the  notes  of  the  banks,  and  of  silver — depends  on  the 
amount  of  gold  that  is  retained  in  the  country,  and  tlir 
use  that  is  made  of  it. 

The  fact  that  a  general  demand  for  payment  in  legal- 
tender  gold  coin  can  be  made,  and  the  certainty  that  it 
will  be — if  gold  becomes  scarce — makes  the  conduct  of 
business  as  uncertain  as  the  manufacture  of  powder,  for 
the  value  of  everything  depends  upon  the  quantity  and 
movement  of  gold.  It  can  be  made  scarce  by  the  failure 
of  the  mines  to  produce;  by  the  failure  of  crops,  when  the 
balance  of  trade  turns  against  this  country ;  by  war,  when 
other  nations  need  it  to  preserve  their  existence,  and  bid 
more  for  it  than  business  can  afford  to  pay.  It  can  be 
made  comparatively,  and,  therefore,  dangerously  scarce 
by  the  ever-increasing  issue  of  bonds  and  stock  on  fran- 
chises and  licenses,  and  disastrously  scarce  by  one  of  the 
groups  buying  it  up  and  withdrawing  it  from  circulation, 
until  they  have  created  a  panic. 

As  long  as  the  intrinsic-value  system  gives  all  of  the 
legal-tender  sovereign  power  to  the  owners  of  gold,  the 
"use-value'''  praetiees   of  the  people  onhj  create  uealth 


THE  EVOLL'TlOy  OF  MOyEY.  147 

for  said  oicncrs  to  appropridtc  as  thry  make  demand  for 
the  payment  of  all  obligations  in  legal  tenders. 

The  people  receive  no  protection  from  the  goverumeut, 
for  it  cannot  give  them  any.  The  only  protection  they 
receive  is  the  incidental  protection  that  necessarily  ac- 
crues from  the  measures  the  grouiJiS  take  to  pro- 
mote their  interests  and  protect  themselves  from  each 
other.  This  protection  grows  Aveaker  and  more  uncertain 
as  concentration  of  corporate  proi>erties  takes  place,  and 
the  number  of  groups  lessen. 

As  additional  advantage  is  taken  of  the  permission  to 
combine  the  capitalization  of  the  right  to  exercise  the 
sovereign  powers  of  the  States  with  the  capitalization  of 
the  right  to  exercise  the  sovereign  powers  of  Congress 
to  issue  money  and  to  impose  a  tax  on  imports,  there  will 
be  such  a  concentration  of  sovereign  iiowers  in  corporate 
rights  that  in  a  short  time  there  will  be  only  a  few  of 
the  Frankensteins  struggling  for  supremacy. 

When  this  final  contest  comes  the  groups  will  have  all 
the  available  gold,  and  it  will  be  the  most  effective  weapon 
used  in  that  warfare;  and  their  war  chests  will  hold  it 
as  safely  as  do  the  war  chests  of  nations  in  a  death 
struggle.  Each  group  will  be  strengthening  its  defense, 
and  this  may  be  easiest  done  by  forays  upon  the  "use- 
value"  practices  of  the  people,  which  will  become  more 
incessant,  until  the  i)anic  is  precipitated  where  one  group 
absorbs  the  others. 

The  one  which  prevails  will  have  the  Government  for 
a  co-partner,  for  the  operations  and  manipulations  will 
have  so  depleted  the  people,  and  so  distressed  the  gov- 
ernment in  its  revenues,  that  it  will  have  been  compelled 
to  join  with  one  of  the  groui)s  to  finance  its  expenses. 

This  combination  of  the  government  and  one  of  the 
groups  may  be  brought  about  in  times  of  peace,  but  if  not, 
it  could  be  by  a  war.  If  brought  about  in  time  of  peace, 
it  would  be  by  the  re|)eal  of  the  ])resent  banking  law,  and 
the  creation  of  one  (ireat  Central  Bank  which  would  have 


148  ^^^  EVOLCTIOy  OF  MOXEY. 

the  right  and  power  to  grant  charters  to  branch  banks 
thronghont  the  country-. 

The  Government  and  the  group  might  be  eijnal  holders 
of  the  stoclv  of  the  bank.  The  directors  might  be  ap- 
pointed, one-half  bv  Congress,  the  other  half  elected  by 
the  private  stockholders. 

The  bank  would  be  the  treasury  of  the  United  States, 
receive  all  its  deposits,  and  finance  all  its  operations. 

It  would  provide  for  the  issue  of  all  money,  but  as 
follows :  The  Central  Bank  would  issue  no  notes,  except 
to  the  branch  banks ;  receive  no  deposits,  except  from  the 
government :  and  pay  no  checks  except  those  drawn  by 
the  Secretary  of  the  Treasury,  as  he,  for  convenience, 
would  cause  deposits  to  be  made  in  the  branch  banks  for 
immediate  and  incessant  use.  It  would  be  strictly  a  hold- 
ing company — that  is,  the  branch-l)anks  would  be  required 
to  purchase  of  the  Central  Bank  such  government  notes 
as  it  might  decide  the  branch-banks  ought  to  issue. 

The  branch-banks  would  be  required  to  secure  the  re- 
turn or  payment  of  these  notes,  by  depositing  with  the 
Central  Bank  a  certain  percentage  of  the  amount  in  gold 
coin,  and  the  balance  in  bonds  and  securities  designated 
by  the  holding,  or  Central  Bank. 

The  percentage  of  gold  coin  required,  and  held  in  the 
vaults  of  the  Central  Bank,  would  be  sufficient  to  pre- 
serve the  "use-value"  of  all  the  notes  issued ;  and  it  would 
be  announced — as  does  the  Bank  of  England — that  the 
Central  Bank  would — at  any  time — redeem  any  of  the 
notes  issued  by  any  of  the  branch-banks  upon  presenta- 
tion. 

The  hundreds  of  millions  of  gold  coin  that  the  branch- 
banks  would  deposit  in  the  vaults  of  the  Central  Bank 
would  make  the  accumulation  of  gold  so  great,  that  the 
fear  of  a  panic  would  be  minimized ;  and,  if  the  intrinsic- 
value  system  is  to  be  continued,  the  Central  Bank  is  neces-' 
isary  to  secure  the  people  protection  from  the  recurrence 
of  panics  whenever  a  general  demand  for  payment  is  made. 


THE  E\OLVTIOX  OF   l/O-YLT.  149 

Under  wise,  patriotic,  aud  honest  niauagenieut  the 
Central  Bank  could  be  made  to  give  the  only  protection 
that  the  people  can  receive  under  the  intrinsic-value  sys- 
tem— where  the  right  to  make  the  general  demand  is  an 
ever-present  danger. 

If,  from  any  of  the  many  causes  that  artificially  create 
an  apparent  or  legal  necessity  for  large  quantities  of 
gold,  the  notes  of  the  government  should  be  presented  to 
the  bank  for  redemption,  until  the  withdrawals  should 
jeopardize  both  the  ''use-value''  of  the  notes,  and  the 
''use-value"  of  the  credits  of  the  people,  the  bank  could 
protect  the  people  from  a  panic  by  what  is  known  as 
the  "Defensive  Premium,"  which  puts  a  check  upon  the 
criminal  enforcement  of  their  legal  right  by  the  Money 
Power. 

The  ''Defensive  Premium"  is  internationally  recognized 
as  legitimate,  though  it  is  an  increasing  partial  repudia- 
tion of  the  contract  intended  to  cease  the  withdrawals  of 
gold  from  the  bank.  It  means  that  the  government  having 
erroneously  given  the  exclusive  exercise  of  the  sov- 
ereign power  of  Tender  to  the  owners  of  gold,  and, 
thereby,  placed  itself  and  the  people  at  the  mercy  of 
their  abusive  and  criminal  enforcement  of  their  right,  en- 
deavors to  protect  itself  and  the  peoj^le,  while  it  preserves 
the  right  to  the  gold  owners. 

When  the  bank  issues  and  sells  its  notes,  as  money, 
it  does  so  under  the  express  agreement  that  it  will  re- 
deem the  notes  in  an  amount  of  gold  equal  to  the  sum 
called  for  by  the  notes  whenever  they  are  presented  for 
redemption,  or  payment,  but  it  does  not  intend  to  do  so. 

The  agreement  was  not  made  to  be  performed,  but  in 
the  calculation  that  it  would  secure  full  and  stable  "use- 
value"  for  the  notes,  notwithstanding  they  were  not  given 
the  power  of  Tender  to  sup]»ort  their  "use-value;"  and 
in  the  hoi)e  that  it  would  maintain  their  "use-value"  on 
an  equality  with  the  ''use-value'*  of  gold  coin,  which  is 
sui)i)orted  by  the  jiower  of  Tender. 


150  '^'^^^  EVOLLTIOX  OF  MOyEY. 

This  govei-umeutal  reeognitiou  of  the  right  of  the  own- 
ers of  gold  to  the  legal-teuder  sovereign  power — which 
supports  the  "use-value"'  of  their  metal — is  the  intrinsic- 
value  system;  and,  so  long  as  the  government  respects 
and  enforces  that  power  in  their  exclusive  interest,  some 
action  is  necessary  to  protect  the  "use-value"  of  its  notes, 
and  the  ''use-value"  of  the  paper  credits  of  the  i^eople, 
from  the  criminal  enforcement  of  their  intrinsic-value 
legal  rights  by  the  gold  owners. 

p]xperience — it  is  claimed — has  demonstrated  that  the 
highest  financial  wisdom  is — not  to  give  the  legal-tender 
quality  to  the  notes  of  government — but  to  gold  coin ;  and 
then  for  the  government  to  endeavor  to  protect  itself  and 
the  people  from  the  avaricious  abuse  of  the  exercise  of  the 
power,  by  the  organization  of  a  Government  bank. 

The  Bank  would  be  organized  to  purchase,  or  make  a 
market  for,  all  the  gold  that  might  be  mined.  It  would 
be  an  unprofitable  holder  of  gold  when  it  could  not  be 
profitably  employed  by  its  owners.  The  gold  would  be 
withdrawn  by  the  Money  Power  whenever  they  could 
make  a  profitable  use  of  it,  until  the  "use-value"  of  both 
the  credits  and  of  the  notes  would  be  destroyed,  and  a 
panic  precipitated,  if  the  "Defensive  Premium"  was  not 
used  to  cease  the  withdrawals.  The  highest  protection 
that  the  people  can  receive  under  the  intrinsic-value  sys- 
tem is  from  a  Government  bank,  and  this  protection  may 
only  be  secured  by  the  "Defensive  Premium." 

Therefore,  if  criminal  raids  upon  the  gold  of  the  bank, 
or  withdrawals  to  prosecute  wars,  should  threaten  to 
jeopardize  the  "use-value"  of  the  notes,  and,  consequently, 
the  "use-value"  of  the  credits  of  the  people  until  a  panic 
was  imminent,  governments  have  deemed  it  patriotic, 
moral,  and  honest  to  violate  the  agreement  and  demand 
a  premium  for  the  gold,  which  is  increased  from  day  to 
day  as  the  notes  are  presented,  until  the  loss  forces  the 
acceptance  of  the  realization  that  the  "use"  of  the  notes 
is  as  serviceable  as  the  use  of  the  gold  coin,  notwith- 


THE  EVOLUTIoy  OF  ilOXEY.  151 

standing  they  are  in  law  dejjendent  on  gold  coin,  and  not 
on  the  power  of  Tender,  for  their  use-value. 

Though  a  central  banking  system,  in  the  hands  of 
honest  and  patriotic  men,  could  be  made  more  protective 
than  any  other  of  the  intrinsic-value  systems,  it  is  more 
dangerous  in  the  hands  of  evil  and  avaricious  men  than 
all  other  systems.  For  it  can  be  so  easily  managed  to 
acquire  the  wealth  and  the  power  of  both  the  people  and 
the  government,  that  the  temptations  have  never  been 
successfully  resisted;  and  the  adoption  of  such  a  system 
is  the  last  step  in  the  centralization  of  wealth  and  power 
that  precedes  the  establishment  of  an  aristocracy,  the 
establishment  of  a  plutocracy,  or  revolution. 

The  bank  has  been  a  necessity  for  years;  has  been  ad- 
vocated by  some  theorists,  and  endeavored  to  be  secured 
by  some  practical  financiers.  It  would  have  been  inau- 
gurated but  for  the  contlicting  interests  of  the  groups. 
While  each  of  the  groups  desire  it,  all  are  ready  to  jom 
in  the  destruction  of  the  group  that  lays  plans  to  secure 
it.  The  Morgan  group,  in  the  confidence  and  iuisolence  of 
what  it  deemed  its  power,  made  the  attempt  a  few  years 
ago.  The  history  of  that  attempt  is  interesting,  and  has 
been  instructive  to  the  other  groups;  and  they  are  pro- 
ceeding with  more  wariness,  and  much  less  confidence. 

The  press  rejjorted  that  ^Ir.  Morgan,  as  a  promoting 
financier,  having  won  the  confidence  of  Wall  street  until 
he  could  command  every  dollar  in  it,  had  consolidated 
a  number  of  New  York  City  banks.  This  Mr.  Morgan 
denied. 

The  press  then  reported  that  he  had  gone  to  Europe, 
and  was  socially  busy  in  the  leading  financial  centers  and 
with  the  crowned  heads — as  the  writer  believes — in  his 
efforts  to  make  an  alliance — ott'ensive  and  defensive — with 
the  Money  Power  of  P>urope,  which  would  compel  this 
government  to  place  him  in  charge  of  the  bank,  if  Con- 
gress should  grant  the  charter. 

A  committee  of  nine  members  had  been  appointed  by 


152  ^^^  EVOLVTlOy  OF  iJOXEY. 

the  Fifty-sixth  Congress  to  prepare  a  financial  bill  for  the 
Fifty-seventh  Congress;  and  shortly  after  Mr.  Morgan's 
return  it  Avas  reported  that  the  committee,  after  consulta- 
tion with  him,  had  appointed  a  sub-committee  of  three  to 
prepare  the  bill. 

A  short  time  thereafter,  through  an  error,  or  as  a  feeler, 
an  ex-Hecretary  of  the  Treasury,  Mr.  Eckles,  set  forth, 
in  a  magazine,  that  the  sub-committee  had  prepared  a 
bill  for  a  Central  Bank,  and  he  discussed  the  merits  of 
the  bill  and  the  bank.  This  Avas  followed  by  the  reported 
excitement  on  the  street  of  a  rapid  advance  in  the  value 
of  the  stock  of  Mr.  Morgan's  bank  from  f 500  for  a  $100- 
share,  to  |850,  due — as  was  reported — to  the  bids  of  the 
Standard  Oil  groujj. 

Various  were  the  reports  of  the  conduct  of  the  stock- 
holders— who  did  not  regard  the  stock  as  Avorth  over 
$500 — as  the  bids  increased  to  $850,  Avhen  it  was  reported 
that  the  stock  Avas  in  Mr.  Morgan's  possession,  and  that 
in  accordance  with  the  agreement  with  which  the  certifi- 
cates of  stock  were  placed  in  his  possession,  he  must 
either  take  it  at  $850,  or  turn  it  OA^er  to  the  OAvners  to  be 
sold.  It  Avas  reported  that  Mr.  Morgan  endeavored  to  quiet 
the  stockholders  into  holding  the  stock,  but  AA'hen  he  could 
not,  he  refused  the  stock  at  $850,  and  told  the  OAA-ners 
there  were  diA'idends  of  $1,000  due  them  on  each  share  of 
stock  they  wanted  to  sell  for  $850. 

The  eflfort  of  Standard  Oil  to  purchase  the  control  of 
his  bank  was  made  ridiculous,  and  Mr.  Morgan  went 
serenely  forward  Avith  his  contemplated  consolidation  of 
corporations  that  conducted  the  business  of  the  world. 

The  Standard  Oil  group  realized  the  danger  to  their 
interests,  if  the  Morgan  group  should  secure  the  passage 
of  the  bill,  and  the  management  of  the  bank. 

They  stripped  for  the  fray — for  it  had  to  be  deadly. 
Mr.  Morgan  Avas  making  the  victory  easy  for  Standard 
Oil,   for  he,  and  his  group,   were  busy  enlarging  their 


THE  EVOLUTION  OF  MOXEY.  I53 

credits  by  the  absorption  and  consolidation  of  the  vast 
properties  they  would  need,  and  could  profitabh'  use. 

It  was  reported  that  the  Standard  Oil  group  was  sell- 
ing large  holdings.  This  continued,  and  as  the  Standard 
Oil  group  sold  and  depressed  the  market,  the  Morgan 
group  bought,  until  the  Standard  Oil  group — which  was 
accumulating  gold  and  money  b}'  withdrawing  it  from 
circulation — realized  that  the  Morgan  group  could  not 
meet  a  demand,  and  the  demand  was  made. 

Though  the  demand  was  only  intended  to  affect  the 
Morgan  group,  and  defeat  the  passage  of  the  bill  for  the 
Central  Bank,  the  loss  on  Wall  street  was  fearful ;  and 
in  the  adjustment,  Standard  Oil  took  control  of  Morgan's 
chief  properties ;  Mr.  Morgan  was  exposed  and  discred- 
ited ;  driven  in  temporary  disgrace  to  Europe,  leaving  the 
adjustment  to  his  son.  After  Mr.  Morgan's  temporary  re- 
tirement, the  concentration  of  properties  was  carried  on 
by  the  different  groups. so  recklessly,  that  exposures  have 
been  made  which  called  for  governmental  action. 

There  has  been  much  agitation  on  the  part  of  the  gov- 
ernment, and  it  has  been  directed,  in  great  part,  against 
Standard  Oil.  Mr.  Morgan  again  appears  as  a  leader  in 
the  financial  arena,  but  more  in  working  harmony  with 
the  administration  than  a.s  an  enemy  of  the  Standard  Oil 
system. 

The  action  of  President  Koosevelt,  in  some  respects,  for  a 
time  so  disconcerted  the  conspirators  that  they  have 
seemingly  ceased  the  open  internecine  strife,  and  laid 
plans  to  check  his  activity.  His  rabid  attempts  to  correct 
some  of  the  abuses,  made  it  necessary  that  he  should  real- 
ize the  extent  of  their  power ;  and  after  they  had  caused 
the  Departments  to  refuse  him  their  supjiort,  he  sum- 
moned the  Governors  of  the  States  to  his  assistance. 

Congress  has  just  adjourned  on  the  eve  of  another  elec- 
tion, after  showing  its  hostility  to  the  President,  and  its 
favoritism  to  the  Money  Power.  It  passed  but  little  legis- 
lation that  the  President  wanted.     It  contemned  the  ap- 


154  THE  EVOLUTION  OF  MONEY. 

peals  of  labor.  It  stood  pat,  because  standing  pat  means 
the  retention  to  class  interests  of  everj'thing  that  it  has 
gained  in  the  past.  The  only  relief  legislation  that  was 
jtassed  was  snch  as  the  Money  Power  secured  in  the 
passage  of  the  Currency  Act. 

This  Act  enables  the  stronger  groups,  by  the  exercise 
of  the  permission  given  their  banks  to  change  many  of 
their  securities  into  money,  which  relieves  them  of  the 
necessity  of  asking  the  aid  of  other  banks,  to  take  the 
better  care  of  their  interests. 

The  utilization  of  this  permission  for  a  few  years,  as 
it  can  and  will  be  manipulated  to  make  money  cheap  by 
large  issues,  and  then  make  it  dear  by  withdrawal  from 
circulation,  will  give  them  such  command  of  a  rising  and 
falling  market,  that  they  can  easily  acquire  all  the  wealth 
which  the  "use-value"  practices  may  create,  without  caus- 
ing a  general  panic;  for  a  general  panic  may  no  longer 
be  necessary,  if  their  purpose  can  be  as  effectively  ac- 
complished by  quiet  and  steady  market  manipulations. 

This  is  the  condition  which  x^recedes  the  coming  elec- 
tion, when  there  is  greater  diversity  of  opinions,  even  in 
the  ranks  of  faction,  than  heretofore  between  parties, 
due  to  the  fact  that  conditions  call  for  harmonious,  intel- 
ligent, patriotic  action  when  ignorance,  corruption,  and 
the  insolence  of  avaricious  lust  for  power  are  in  the 
ascendent. 


INDEX. 

PAGE 

Amsterdam,  Bank  of 24 

Aristocracy  of  land  and  slaves 8G 

Banks,  war  between    72 

Banks,  dominant  instruments  129 

Bank  of  U.  S.,  First,  a  monopoly G4,     65 

Bank,  Central,  reason  for 148 

Bank,  Central,  effort  to  secure 151,  152 

Bank  credits,  benefit  of 28,  29,     30 

Barbarian  idea  of  value 17 

Benton,  Senator,  views  of  on  banks  80 

Bonds,  base  for  support  of  notes 90 

Calhoun,  Senator,  views  of  on  banks  81 

Charters,  how  granted   122 

Citizen,  why  "word"  ^as  chosen 68 

Civilization,  germ  of 13 

Civilization,  may  not  be  checked 22,     23 

Civilization,  what  advances 25 

Cleveland,  President,  reason  for  bond  issue 109-111 

Coin   supports   bank   credits 23 

Colonies,  issue  of  money  by 53 

Constitution,  when  I'egard  for,  an  evil 85 

Constitution,  wherein  a  retrogi-ession 58 

Cooper,  Peter,  Greenback  candidate  103 

Corporation,  not  a  citizen   120,  121 

Corporations  operated  as  a  unit 122,  124,  125 

Corporations  gain  strength,  how    129 

Corporation."*  enlarge  holdings,  how   147 

Crawford,  Secretary  of  Treasury,  report 80 

Credits,  value  of,  depends  on  use 144 

Dark  Age,  freedom  from  bondage  of 51 

Dartmouth  College  case,  reason  for  decision 73.  120 

Defensive  premium,  what  it  is,  how  used 148,  149,  150 

Degeneracy  caused  by  intrinsic  value  51 

Democracy,  what  is    87 


156  INDEX. 

PAGE 

Desire  made  a  concretion   18 

Devices  to  effect  exclianges,  origin  of 22 

Devices  to  effect  excliauges,  bow  sliould  be  s-upplied 37 

Fetisb  worsbip  of  metals,  effect  of 57 

Finance,  bigb,  wbat  is  123,  133 

First  bank  of  U.  S.  vs.  Deveaux 68 

Francbise,  wbat  is  a 123 

Georgia,  State  of.  Assessed  tbe  bank  67 

Gold  and  silver,  lose  rigbt  to  be  used  as  money 22,  23,     35 

Gold  and  silver  are  value,  error  of 62 

Gold,  wbat  are  uses  of 100 

Gold  bas  no  practical  use  as  money  101,  102 

Gold    made    legal    valuator 93 

Gold,  power  attributed  to 138 

Gold,  value  of  depends  on  tender 145 

Gold,  value  of  indeterminate  34,     35 

Gold  Reserve  legalized  96 

Gold  coin,  mere  official  representatives 142 

Government  must  issue  money 59 

Government,  demand  tbat  it  make  its  money  good 94 

Government,  changed  to  a  plutocracy   67 

Government  and  corporation  own  bank 147 

Governors  of  States,  action  of 132 

Greenbacks,  war  against  by  banks 95 

Greenback  Party  makes  canvass  103 

Hamilton,  Secretary  of  Ti-easury,  views  of  on  money 61 

Harrison,  President,  refusal  to  issue  bonds 108 

Immigration,  regulation  of   141 

Interstate  commerce    114 

Interstate  commerce  clause,  reason  for  116 

Intrinsic  value,  unit  of 63 

Intrinsic  value  system  strengthened 57 

Intrinsic  value,  degeneracy  caused  by 51 

Intrinsic  value,  error  of  system 99 

Intrinsic  value,  inefficient,  why  25 

Issue  of  money,  a  sovereign  power 112 

Jackson,  President,  hostility  to  bank  77 

Jefferson,  Thomas,  views  of  on  money 63 

Juilliard  rs.  Greenman 97.  102 

Kings  of  Finance,  influence  of 56 


IXDEX.  157 

PAGE 

Kentucky,  State  of,  issues  money   Hi 

Labor,  source  of  value 49 

Lawyers,  enlarged  importance  125 

Legal  tender,  supports  bank  credits  29 

Legal  tender  repudiated  71 

Legal  tender,  power  of,  when  properly  applied S7,  88 

Legislature,  carelessness  of  grants  124 

Lincoln,   President    104 

Maryland,  State  of,  assessed  bank 118 

Missouri,  State  of,  issues  money  To 

McCullough  vs.  Maryland  72,  118 

Money  of  account 45,  56,  60 

Money,  changes  in  the  issue  of 21 

Money,  issue  of 99 

Money,  issue  of,  how  provided  for 141 

Money,  issue  of  must  conform  to  practices  of  people 146 

Money,  the  issue,  a  sovereign  power 112 

National  banks,  issue  money 88 

Paper  credits,  use  of 38 

Paper  credits,  value  of  depends  on  gold 146 

Panic  of  1837,  cause  of 78.  79 

Panic  of  1873,  cause  of 92 

Panic  can  be  made  local  134 

Paper  money,  representatives  of  words  of  value 11 

Parties,  cause  of  origin    67 

Patriotism  suffers  vicariously    84-  86 

Pensions,  why  increa.sed 106 

People,  how  protection  secured 140 

Powers  of  constitution   53 

Power  of  tender,  effect  of  exercise 56 

Plutocracy     , 86 

Promoters,  cause  of  their  activity  134,  135 

Republicanism,  what  is   87 

Republican  party,  origin  of 69 

Reserved  powers  of  States,  give  protection  119 

Resumption  Act  of  1875.  effect  of 89 

Roosevelt,  President,  buncoed  134,  135,  137 

Settlement  of  contracts,  when  unjust 44 

Silver  dollar,  reason  why  not  equal  to  gold  dollar 93 

Silver,  why  demonetized   93 


158  INDEX. 

PAGE 

Silver,  action  of  the  Congress  of  1878 107 

Smitli,  Adam   11,  49,  -  go 

Stewart,   Sir  James   11,    45 

Sovereign  power,  is  it  a  private  right? *56 

Sovereign  power,  ignorance  of 113,  114 

Sovereign  power,  who  will  exercise 75 

Sovereign  powers,  distribution  of 55 

Sovereign  powers,  how  they  should  be  distributed 139 

Sovereignty,  conflict  over  its  exercise  117,  118 

State  banks    GG 

States,  reserved  powers   112 

Stevens,  Hon.  Thad..  views  of  on  bankers 85 

Supreme  court,  reason  for  origin 115 

Supreme  court,  failure  to  realize  duty 117-120,  121 

Supreme  court,  usm-ped  power 123 

Supreme  court,  made  corporations  sovereignties 113 

Tender,  origin  of   3G 

Tender  changes  value  from  worth  to  use 42 

Tender,  effect  of 5G.  59,     84 

Tender  perfects  intrinsic  value  system G3 

Tender,  exercise  of  constitutional   97,  102.  110 

Value  of  paper  credits  determined 42 

Value,  Congress  may  not  create 9G 

Value  is  labor   143 

Value  determined  by  use  or  service 19 

Value,  origin  of  the  idea  of 27 

Value,  definition  of   41 

Venice,  Bank  of   27 

War  of  1812,  how  financed 70 

Watering  bonds  and  stocks,  authority  for 128 

Watering  bonds  and  stocks,  conflict  over 129 

War  of  1861,  result  of  peculiar  civilization SG 

Words,  standards  of  value   11 

Words  of  money  of  account,  labor  expressions 142 


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